Serious dumping, page-9

SGW extra info from my earlier post.


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Sons smacked again after further profit warning
15-November-2002

The world's biggest supplier of tantalum, Sons of Gwalia (SGW) today took a further dive after it forecast lower than expected full year net profit of between $34 million and $42 million.

The consensus forecast for earnings was cut to $60 million after the October 18 warning, down from $75 million previously.

On October 18 the company was smacked lower after it would fall short of forecasts in the 2003 financial year. The company cited problems at its Tarmoola gold mine and falling demand for its tantalum.

Today, it reiterated the October 18 statement that it wouldn't meet brokers' earnings expectations for the year ending June 30, 2003.

“Also, as previously advised, first half profit will be significantly less than the second half due to the fact that we will have increased tantalum sales in the second half along with better quality gold production,” executive chairman Peter Lalor told the annual general meeting.

“Until we have carried out further reviews of our tantalum operations and settled on the operating configuration, it is difficult to provide specific guidance on the financial 2003 earnings.

“However, based on current knowledge and expectations from our operations and corporate activities, we anticipate full year earnings to be in the range of 20c per share to 25c per share or between $34 million and $42 million on an after tax basis.”

The company also forecast gold production to be between 580,000 and 600,000 ounces in 2002/03, falling to at least 550,000 ounces the following year.

The company also told shareholders that based on anticipated sales to December 2005, it expected to generate approximately $US600 million of US dollar denominated revenue streams in this period, most of which would come from its tantalum business.

The Perth-based gold and tantalum company reported a 10.4% fall in net profit to $57.2 million for 2001/02. The result included significant items which reduced the profit by $12.1 million.

SHAW Stockbroking gold analyst Andrew Richards highlighted that the earnings guidance was well below market expectations.

“We note however this profit range is subject to further review of the tantalum operations,” Mr Richards said.

Mr Richards also underlined the company’s hedge book issues at current exchange rates.

“Assuming no additional revenue is forthcoming and exchange rates remain at around current levels, SGW estimate that the hedge book restructure costs would be $35m,” he said.
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Have a good weekend all