Delta Electrical Industries Limited - Trading Update
Release Date: 21/05/2004 10:42:39 Code(s): DEL
DELTA ELECTRICAL INDUSTRIES LIMITED - TRADING UPDATE
DELTA ELECTRICAL INDUSTRIES LIMITED
(Registration Number. 1919/006020/06)
(Incorporated in the Republic of South Africa)
Share Code: DEL ISIN: ZAE000002036
(`Delta`)
TRADING UPDATE
Delta shareholders are reminded that the Delta group`s headline earnings for the
half year ending 30 June 2004 are expected to be substantially lower than those
of the prior comparative period as reported in the results announcement for the
year ended 27 December 2003 published on 1 March 2004 as follows: `Given the
uncertainties in the Electrolytic Manganese Dioxide (`EMD`) market and assuming
current exchange rates, the group`s interim earnings for 2004 are expected to be
substantially lower than for the same period in 2003.`
Further to this, Delta shareholders are advised that the Delta group`s headline
earnings for the year ending 27 December 2004 are also expected to be
substantially lower than those of the prior comparative period. The reasons for
the lower than previously reported headline earnings are set out below.
In May 2003, Kerr McGee, a major EMD competitor in the US, announced that they
had ceased production at their US plant for an unspecified period of time. In
August 2003, Kerr McGee instituted an anti-dumping duty petition against all non
US EMD producers. They withdrew the petition on 20 February 2004, a week before
the US Department of Commerce was due to make its preliminary ruling on the
petition and it can now be confirmed that Kerr McGee has restarted production at
their US plant.
Following recent discussions between the management of Delta EMD and all the
major battery manufacturers in the US, it appears that the battery manufacturers
have purchased additional EMD from US EMD suppliers rather than import due to
the uncertainty caused by the anti-dumping duty petition. This is expected to
result in the group`s EMD sales tonnage for the current financial year being
lower than it was in 2003. Furthermore, the relative strength of the South
African rand and Australian dollar to the US dollar continues to impact
negatively on EMD revenues and profits.
The Equipment Spare Parts (`ESP`) division is expecting earnings for the year
ending 27 December 2004 to be lower than those of 2003 due to the strength of
the rand and a downturn in the markets it serves.
The group`s remaining businesses are performing satisfactorily.
These forecasted results have been reviewed by the group`s auditors, Deloitte &
Touche, and have been reported on without qualification. The auditors report
regarding the forecast is available for inspection at the group`s registered
office.
Further details and prospects for the full year will be provided with the
interim results announcement, expected during August 2004.
Sandton
21 May 2004
Sponsor
Nedbank Capital
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