CMA Corp forecasts $35m first half loss

Metal recycling group CMA Corporation says it expects a net loss after tax of some $35 million in the first half of this financial year largely on the back of falling commodity prices and a weaker Australian dollar.

In a statement, CMA estimates an earnings before interest, tax, depreciation and amortisation loss of between $25 million and $30 million.

It added that the $35 million net loss included some $15-17 million in stock losses that have arisen from the drop in commodity prices, and $7-9 million potential foreign exchange loss due to the dishonouring of letter of credit and cancellation of sales contracts.

A further loss of some $5-6 million in doubtful debts has also been included.

"A delay in the commissioning of shredders to be installed at the Ringwood facility in Victoria and the Auckland facility in New Zealand has also impacted the result," CMA said.

"The Group has also been impacted by employee retrenchment costs having reduced total staff by approximately 10%."

CMA managing director Doug Rowe said despite the poor start to the 2009 financial year, the board remained positive about the prospects in the medium to long-term.

"We have a very strong network of operations and with the support of major investors we feel confident that CMA will rebound strongly once the markets stabilise," he said.

Shares in CMA were down three cents to 15c at 11:27 AEDT.