Orbital forecasts $3m interim loss ORBITAL Engine Corp Ltd...

Orbital forecasts $3m interim loss





ORBITAL Engine Corp Ltd expects to book a narrower first half loss of around $3 million as it moves closer to its goal of cash neutrality.

It compares to the group's $20.7 million first half net loss for the year ending December 30, 2001.

It posted a $26.78 million full year net loss for 2001-02.

"At this point, we're expecting to book a loss of about $3 million, which is nearly $18 million better than the previous first-half loss of $21 million and is in line with budget year to date," chief executive Peter Cook told the Australian Stock Exchange's corporatefile.com.au.

Mr Cook said Orbital's goal of delivering cash neutrality from underlying trading in 2002-03 was on target.

"We're making steady progress and are trading ahead of budget in all areas except licence fee income, which is typically very unpredictable in terms of timing."

He said non-recurring items, mostly redundancy costs and some working capital items, have had a cash impact in the first half but would have a minimal impact on profit.

"We'd expect cash to have bottomed at approximately $6.5 million by the end of December and to be a similar figure by the end of June 2003."

He said most of the major non-trading cash items would have been discharged by the end of January.

In terms of Orbital's performance in the first half, Mr Cook said system sales were up 26 per cent year-on-year in the five months to November and 11 per cent over budget.

However, licence income the group had expected from Delphi Automotive Systems had not come through, placing the automotive unit behind budget.

But Mr Cook said Orbital had adjusted its licence fee income expectations and believed it could compensate for any short-fall by cost control.

Meanwhile, new arrangements with the company's Synerject joint venture with Siemens-VD, to be announced in the near future, were not expected to alter the 50:50 ownership structure.

Mr Cook said Synerject was performing ahead of budget and both partners remained committed to the joint venture which supplies combustion process technology and port injection technologies to three European scooter manufacturers and to the Taiwanese.

Mr Cook said there were also opportunities for Synerject in India and, through a range of model extensions, in the marine market.

Synerject generated earnings before interest and tax for the first five months was $US697,000 ($A1.23 million), compared with a loss of $US2.5 million ($A4.43 million) previously.




-AAP