dumped again. wake up australia!, page-4

sons of gwalia shares slump ahead of profit result Sons of Gwalia shares slump ahead of profit result

PERTH, Feb 18 AAP - Shares in Sons of Gwalia Ltd have slumped
more than 5 per cent today as investors brace themselves for a
disappointing interim profit result and the possibility of a
reduced dividend.
Analysts are expecting the gold and tantalum miner to record a
net profit of $8-$10 million for the six months to December 31,
2002, when it releases its first half results tomorrow.
It compares to Sons of Gwalia's $34.5 million net profit for the
first six months of 2001/02 and reflects a woeful five months for
the Perth-based company.
The stock has plunged from $4.70 in October to below $2.00 amid
concerns about its gold and foreign exchange hedge books and after
the group warned problems at its Tarmoola gold mine in WA and
falling tantalum demand would impact 2002/03 earnings.
The shares are again under pressure today, slumping nine cents
to $1.84 at 1443 AEDT, after falling as low as $1.82.
In contrast, other leading gold stocks have firmed on the back
of a slightly higher gold price.
"The shares are under a bit of pressure already ... I think
people are a bit nervous about tomorrow," said a resources analysts
who declined to be named.
"When you come out with a profit that disappoints you just get
slaughtered."
The analyst said he expected the group to post an interim net
profit of around $8-9 million and had pencilled in full year
earnings of $28 million.
Sons of Gwalia's executive chairman Peter Lalor warned in
November that 2002/03 earnings could fall by as much as 40 per
cent, to between $34 million to $42 million, down from $57.2
million last year.
"I think the gold division is still struggling, certainly both
quarters are pretty poor," the analyst said.
An improvement in the second half of 2002/03 is expected to come
from the group's gold division, particularly from its Tarmoola
operation which it purchased from Pacmin Mining in 2001.
"We're anticipating some improvements in cash costs and
production ... I have $28 million now, (but) we'll see."
He forecast a 10 cents per share dividend for the full year
compared to 20 cents in 2001/02 which comprised 12.5 cents in the
first half, dropping to 7.5 cents in the second half.
But he said it would be not surprising if the dividend was cut
further.
"It might be cut again to five cents ... obviously if they did
do that it would be another negative."
Another resources analyst has forecast a first half net profit
of just under $10 million, but said he would not be surprised it
was came in less than that.
"It will be interesting to see not so much the headline numbers
but looking behind the numbers and see what costs they have
capitalised ... and what the EBIT (earnings before interest and
tax) margins are for the tantalum assets," he said.
AAP