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AGI
AGI
AGI - AG Industries Limited - Trading Statement
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 STATEMENT
This trading statement, in respect of the results for the year ended 30 June
2009 ("the year under review"), is published in accordance with paragraph 3.4
(b) of the Listings Requirements of the JSE Limited.
Shareholders are advised that the Group`s headline loss per share is forecast to
be between 69 cents per share ("cps") and 79 cps (2008: 16.3 cps) and the basic
loss per share is forecast to be between 136 cps and 146 cps (2008: 15.4 cps)
for the year under review.
The difference between the basic loss per share and headline loss per share
arises as a result of the impairment of goodwill and plant and equipment that do
not form part of the headline loss per share.
The financial information on which this trading statement is based has not been
reviewed or reported on by the Group`s auditors. AGI`s reviewed financial
results will be released on or about Monday, 21 September 2009.
EXPLANATION OF TRADING CIRCUMSTANCES AND RESULTS
Shareholders are referred to the Group`s announcement made on 8 June 2009. At
the time it was reported that:
Trading conditions had deteriorated markedly and that this deterioration has had
a negative impact on the AGI`s operating results and cash flow and that the
Group had made operating losses during the current financial year.
A major restructuring program was being undertaken that included reducing AGI`s
cost base to place the Group on a firm foundation and the potential disposal of
non-core assets.
The impact of the global economic slowdown and resultant decrease in demand has
had a significant effect in the second half of the year under review. Lower
volumes and deflation in the aluminium price has resulted in sales decreasing
approximately 20% year on year for the second half of the year (compared to a 4%
increase year on year for the first half of the year). This, together with the
margin squeeze experienced as a result of the slowdown in the residential
construction sector, has resulted in significant losses in the second half of
the year under review.
The increased losses year on year have been further exacerbated by the following
factors:
The impairment of a significant portion of the goodwill on the Group`s balance
sheet;
The impairment of certain plant and equipment in the Roodekop Division;
The reversal of deferred tax assets previously raised in the balance sheet;
The sale of slow moving stock at below cost;
Stock devaluations; and
Retrenchment costs.
In view of the impact of the current trading conditions on the Group`s
profitability the Group entered into negotiations with its bankers and major
suppliers and has arranged additional temporary facilities.
It is considered that the Group`s business will be viable once restructured.
The implementation of the restructuring plan is designed to place the Group in a
position where it should become profitable and able to generate cash in the
medium term.
Johannesburg
20 July 2009
Sasfin Capital
(A division of Sasfin Bank Limited)
Date: 20/07/2009 13:00:56 Produced by the JSE SENS Department.
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