| Wed 29 Sep 2010, 11:10 | | DTA - Delta EMD Limited - Trading statement for the year ending 28 December 2010 |
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DTA
DTA
DTA - Delta EMD Limited - Trading statement for the year ending 28 December 2010
and further cautionary announcement
Delta EMD Limited
Incorporated in the Republic of South Africa
Registration number 1919/006020/06)
Share code: DTA ISIN: ZAE000132817
("Delta" or "the Group")
TRADING STATEMENT FOR THE YEAR ENDING 28 DECEMBER 2010 and FURTHER CAUTIONARY
ANNOUNCEMENT
TRADING STATEMENT
Delta shareholders are referred to the announcement released on SENS on 17
August 2010 relating to its unaudited results for the six months ended 27 June
2010 and the comments on prospects contained therein.
Global economic conditions continue to limit demand for alkaline batteries with
a corresponding contraction of global demand for alkaline grade EMD. The market
is not expected to recover before 2011.
Further, the continued strength of the Rand against the US Dollar, EURO and Yen
has made Delta`s alkaline grade EMD selling prices less competitive and
consequently Delta`s alkaline grade EMD sales have reduced and are not expected
to improve as earlier anticipated.
The Group`s 2010 second half sales volumes are now expected to be lower than
during both the first half of 2010 and the second half of 2009 and will include
less alkaline grade EMD sales volumes, thereby affording a less attractive sales
mix.
Operating profit for the second half of 2010 will be reduced by lower sales
volumes, a less favourable sales mix, and limited production and also will not
include the additional contribution provided from the one-off high margin
lithium EMD sales made during the second half of 2009 and first half of 2010.
Earnings after taxation for the full year ending 28 December 2010 will include
R14.7 million of secondary tax on companies paid in connection with the Group`s
special dividend as well as the R56.6 million of profit realised on the disposal
of the Kooragang Island residue disposal site, and are now forecast to be
between R116 million and R127 million (2009: R167 million). Headline earnings
after taxation for the full year ending 28 December 2010, including the STC paid
but not the profit realised on disposal of the residue disposal site, are
forecast to be between R60 million and R71 million (2009: R158 million).
Earnings per share for the full year ending 28 December 2010 are forecast to be
between 236 cents and 258 cents (2009: 341 cents), and headline earnings per
share for the full year ending 28 December 2010 are forecast to be between 122
cents and 144 cents (2009: 323 cents)
North American EMD market conditions are unlikely to sustain Delta EMD`s
historic sales volumes in that market until the successful commercialisation of
the Group`s premium grade product. Consequently the Group expects sales volumes
and sales mix for the near future to be broadly in line with those of the second
half of 2010.
The forecast financial information on which this trading statement is based has
not been reviewed and reported on by the Group`s auditors.
Delta`s results for year ending 28 December 2010 are expected to be released on
SENS on 22 February 2011.
FURTHER CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the cautionary announcement released on SENS on 18
January 2010, and the subsequent related cautionary announcements, wherein
shareholders were advised that the Company has commenced a process intended to
realise value from its last remaining operation, being Delta EMD South Africa,
which process might result in the disposal of that operation.
Further to the aforementioned announcements, shareholders are advised that the
process is ongoing and might have a material effect on the price of the
Company`s securities and should continue to exercise caution when dealing in the
Company`s securities until a further announcement is made.
Nelspruit
29 September 2010
Merchant bank and sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Legal advisor
Webber Wentzel Attorneys
Date: 29/09/2010 11:10:26 Produced by the JSE SENS Department.
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