Clean energy technology group Orbital Corp says it expects to post a loss of up to $2.7 million for the first half 2008/09 as it reviews its option to maintain its interest in a manufacturing joint venture.
Clean energy technology group Orbital Corp says it expects to post a loss of up to $2.7 million for the first half 2008/09 as it reviews its option to maintain its interest in a manufacturing joint venture.
In a statement today, the Balcatta-based company reiterated that it expects to make a loss in the 2008/09, with first half loss to be in the range of $2.2 million and $2.7 million.
"While Orbital does not anticipate a significant turnaround in its major customers' markets in the near term Orbital does expect relatively improved trading in the second half - in line with the normal seasonal trend experienced in previous years," Orbital said.
Additionally the company said it was reviewing its 50 per cent interest in Synerject LLC, its JV with Continental Corp, which requires a cash outlay of $US4 million ($A6 million).
"Orbital is reviewing this option in line with overall management of capital and operating cash requirements," the company said.
Cash at the end of November increased to $12.2 million, up from $8.8 million recorded at the end of the 2008 financial year.
The company made a net annual profit of $500,000 for the 2008 financial year.
The announcement is pasted below:
PERTH, AUSTRALIA - 11 December 2008: Orbital Corporation Limited (ASX: OEC - "Orbital") today provided updated guidance on its financial results for the half year ending 31 December 2008.
Orbital advised at its Annual General Meeting in October that as a result of a softening of trading conditions in a number of its, and Synerject's, key customer markets, particularly the North American marine market it expected to post a loss in the first half of the year; and that the full year result for 2008/09 could be a loss overall.
With the continued deterioration in global economic and financial conditions since the Company's AGM, the Company advises that it now expects a net loss in the first half in the range of $2.2 million to $2.7 million and confirms the previous guidance of a loss for the financial year.
While Orbital does not anticipate a significant turnaround in its major customers' markets in the near term Orbital does expect relatively improved trading in the second half - in line with the normal seasonal trend experienced in previous years.
Notwithstanding the current difficult trading conditions, Orbital has strengthened its financial position with cash at 30 November 2008 increasing to $12.2 million compared with $8.8 million at 30 June 2008.
During the first half Orbital received $2.8 million from the Federal Government, which is being used to invest in a heavy-duty engine testing facility in Perth. Taking into account this capital commitment, Orbital expects it has sufficient remaining cash to support anticipated operating requirements for the foreseeable future.
Orbital has an option to maintain its ownership of Synerject LLC (Orbital's manufacturing joint venture with Continental Corporation) at 50%, for a cash outlay of US$4 million. Orbital is reviewing this option in line with overall management of capital and operating cash requirements.
"The global slowdown has presented Orbital and its customers with a challenging market place and we are clearly not immune to the impact of the current financial and economic conditions" said Orbital's CEO Terry Stinson.
"We intend to manage our costs carefully but maintain critical engineering expertise to ensure that we stay competitive and do not forego our future strategic opportunities".
"Under these difficult and uncertain conditions we are in the fortunate position of having a strong balance sheet," said Orbital's Chairman Peter Day.
"Our cash position should ensure that we can maintain our operating capability and take up future business opportunities as they arise."
