| Thu 5 Mar 2009, 8:45 | | AGI - AG Industries Limited - Trading update |
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AGI
AGI
AGI - AG Industries Limited - Trading update
AG INDUSTRIES LIMITED
(Incorporated in the Republic of South Africa)
Registration Number: 1980/004051/06
SHARE CODE: AGI
ISIN: ZAE000039467
("AGI" or "the Group")
TRADING UPDATE
The board of AGI wishes to inform shareholders that progress on the Group`s
three-year turnaround plan in its South African business, as announced in
September 2008 is on track and trading improvements and efficiencies as a result
thereof can be seen in the interim trading of the Group, the full benefits
thereof should begin to flow in the 2010 financial year.
EBITDA
EBITDA per ordinary share (excluding the cost of the impairment of goodwill) for
the Group for the 6 months ended 31 December 2008 ("the reporting period") is
expected to improve by between 30% to 35% from 16.5 cents per ordinary share in
the comparable period ("the period ended 31 December 2007").
Cash Flow
In the reporting period there was a marginal net cash inflow from operating
activities (2007 - R60 million outflow).
Basic and Headline Earnings per Share
The Group wishes to advise shareholders that the headline loss per share for the
reporting period is expected to improve by between 65% to 75% on the comparable
period`s loss of 2.6 cents per share.
However, basic earnings per share have been impacted negatively by 9,5 cents per
share by the factors mentioned below and is expected to be 145% to 155% lower
than the loss of 2.7 cents per share of the previous corresponding period.
1.The impairment of goodwill of R17,1 million in the Aluminium Division:
- Given the current economic conditions as well as the performance of the
Aluminium Division and after consideration of the ongoing program of product
rationalisation in this division, management deemed it prudent to impair a
portion of the goodwill in this division.
2. The postponement of the raising of R 2.6 Million deferred taxation assets:
- Management resolved to defer this until the relevant trading entities in the
Extrusions division return to profitability. This is expected in the 2010
financial year.
OPERATIONAL REVIEW
Southern African Operations
Revenue decreased by 2% due primarily to deflation in commodity prices, whilst
operating profit increased by 17% in the division.
During the reporting period:
- Staff costs and overheads were cut strongly, counteracted by inflationary
pressure;
- Productivity was improved;
- Working capital improvements were made resulting in improved cash flow at
operational level;
- The EBITDA margin (excluding goodwill impairment) improved from 5% to 8%.
International Operations
Revenue in this division increased from 74% for the reporting period, while
operating profit increased by 16%.
- Germany grew revenues by 14%, while operating profits increased by 6%;
- UK revenues dropped by 14% as a result of the economic crisis, resulting in a
drop in operating margin from 14% to 10%;
- The Singapore business recorded its maiden operating profit from a zero
revenue base.
The information in this trading statement has not been reviewed or reported on
by the Company`s auditors. The interim results announcement for the six month
period ended 31 December 2008 is expected to be published on or about 9 March
2008.
Johannesburg
5 March 2009
Sponsor: Sasfin Capital
A division of Sasfin Bank Limited
Date: 05/03/2009 08:45:02 Produced by the JSE SENS Department.
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