| Mon 23 Jun 2008, 7:14 | | DEL - Delta Electrical Industries Limited - Trading statement |
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DEL
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DEL - Delta Electrical Industries Limited - Trading statement
Delta Electrical Industries Limited
Incorporated in the Republic of South Africa
(Registration number 1919/006020/06)
Share code: DEL ISIN: ZAE000002036
("Delta" or "the Company" or "the Group")
TRADING STATEMENT
Delta shareholders are referred to the shareholder update announcement released
on SENS on 5 June 2008 in which shareholders were advised that:
"Delta EMD`s sales of remaining Australian stocks as well as South African
produced EMD have met expectations. Selling price increases made at the
beginning of the year to provide acceptable margins as well as those selling
price increases made since to cover the higher cost of Manganese ore have
provided better than expected margins, partly due to stock profits, and trading
profit also has benefited from reduced overhead costs."
Shareholders are accordingly advised that the trading performance of the
business for the six months ending 27 June 2008 is forecast to be a substantial
improvement from the six months ended 27 June 2007.
Earnings and headline earnings before taxation for the six months ending 27 June
2008 are both forecast to be between R40 million and R46 million (2007: Losses
and headline losses before taxation of R31 million). Earnings per share for the
six months ending 27 June 2008 are forecast to be between 63 cents and 75 cents
(2007: Loss per share of 60.8 cents). Headline earnings per share are forecast
to be between 57 cents and 69 cents (2007: Headline loss per share of 60.8
cents).
Modest sales volume increases and improved selling prices have provided improved
margins, which have benefited trading profit.
With a reduction of Australia`s EMD stocks and improved trading profit
substantial cash inflows are forecast for the six months ending 27 June 2008,
and half year cash balances are forecast to be in excess of R300 million
(December 2007: R218.3 million). The planned R112.6 million capital reduction
will be paid from the half year cash balance.
Cash flows during the half year reflect the reduction of Australian working
capital as well as the payment of substantial redundancy and de-commissioning
costs. Whilst the half year cash flows do not include proceeds from the sale of
the Group`s land, plant or equipment in Australia, opportunities for realising
value from those assets continue to be developed with favourable prospects.
On 13 June 2008, the Japanese government announced provisional duties on the
import of EMD from China (34.3% to 42.7%), Spain (14.0%), Australia (29.3%) and
South Africa (14.5%). The provisional duties will be effective from 14 June
2008 and efforts to demonstrate that such duties are not warranted, and to agree
price undertakings, continue. Final determinations are expected before October
2008.
The US Department of Commerce and US International Trade Commission continue to
consider the final imposition of duties on EMD imported from China
(provisionally 236.8%) and Australia (provisionally 120.5%). They also continue
to consider whether to impose retrospective duties on EMD imported from
Australia within 90 days prior to the notification of provisional duties during
March 2008. Final determinations from the US DOC and US ITC are expected during
August and September 2008, and as such no allowance for the payment of US
retrospective duties is made in the forecast financial information on which this
trading statement is based. Import of EMD produced at the Group`s Australian
plant was discontinued in March 2008 following the closure of that plant.
The forecast financial information on which this trading statement is based has
not been reviewed and reported on by Delta`s auditors. Delta`s results for the
six months ending 27 June 2008 are expected to be released on or about 11 August
2008.
Johannesburg
23 June 2008
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 23/06/2008 07:14:44 Produced by the JSE SENS Department.
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