What Is A Profit Warning

Ladies and Gentlemen

When the market searched for information what did it find. Very little in respect of ERG's notice to the market as to its underlying loss.

If I am not mistaken, ERG indicated that it would make a profit in the second half. Perhaps shareholders would have found it a surprise that this was never the case.

So....now for a reality check. How long did it take before the company announced its results....12/9/2002. Amazing that the company became aware of its loss so long after the 30 June 2002. Some where along the journey, perhaps on the 1st January 2002 that a second half profit was doubtful.

It must have surprised management that they had an underlying loss. Even after so called one off adjustments its was still a significant half year loss post December 2001.

If I am not mistaken. The Board have a responsibility to inform the market on an ongoning basis. The term is referrred to as "CONTINUOUS DISCLOSURE" does the actions of this board full within the conventions of corporate governance.

Perhaps we should all reflect.

I will ask this question time and time again.

WHY ARE COMPANIES WITH GOING CONCERN ISSUES NOT ASKED TO REPORT TO THE MARKET ON A MORE REGULAR BASIS.

This company has again ignored very basic corporate governance issues.

If you happen to be an ERG shareholder....I ask this very simple question. WHY!!!!!

Why...hold this stock where there is so much uncertainty

Why...hold this stock when the board have demonstrated no respect for the market.

Why...hold this stock when the underlying business is consumed by business opportunities that generate underlying losses.

Why...hold a stock in a company that claims to make an EBITDA profit of long term project. This is in fact an admission that the replacement value of the assets is insignificant and should not be recouped. Unfortunately shareholders have an entitlement to recoup the full value of assets committed to these long term projects. Otherwise the Board have P_ssed Shareholder value against the wall once again.

Why...Invest in a company that measures profitablity on EBITDA at all...This demonstrates a total misunderstanding of shareholder value creation. The dot.com bubble has burst and the measure of profit on an EBITDA basis is not reflective of the underlying investment in the asset.

Why...invest in a company that has claimed to be an infrastructure company when it measure success on an EBITDA basis. This is in itself a measure that does not measure Net Present Value returns for shareholders. The recoupment of value must always be measured against the original value of the investment.

From my very basic knowledge, long term underlying losses does not create long term value for shareholders.

If this equates to long term share prices...The ERG share price is still too expensive.

Promises of contracts around the corner and some obscure project in the USA does not generate real value.

If you want to talk about stratergy. Can we focus on real shareholder creation that is devoid of long term contracts that are based on "subject too" opportunity that has yet to be substantiated. Invest in the basic and the rest will follow. VERY SIMPLES BUT VERY TRUE.

Poor old shareholders...and there are many that have continued to believe in the dream and have invested in cold hard cash in the PROMISES made by this company.
How do you feel about the rights issue....How do feel about the promise of a convertible note buy back...How do you feel about the second half loss for 2002 when the company announced that it expected a 2nd half profit. JUST ANOTHER DREAM.

What is a Profit Warning...Nothing in the case of ERG...they do not understand the basics. If that is a measure then there is no hope.

Good Luck to you all.