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DTA - Delta EMD Limited - Trading Statement Delta EMD Limited Incorporated in the Republic of South Africa (Registration number 1919/006020/06) Share code: DTA ISIN: ZAE000132817 ("Delta" or "the Group") TRADING STATEMENT Delta shareholders are referred to the Group`s 2009 unaudited Group results announcement for the six months ended 27 June 2009 and the trading statement for the 2009 financial year contained therein, dated 7 August 2009. Full year operating profit is forecast to be marginally better than in 2008 despite lower sales volumes associated with sales of the former Australian plant stock being concluded during 2008. Improved sales prices implemented in 2008 and at the beginning of 2009 as well as savings associated with the closure of the Sandton corporate office have contributed. Operating profit is forecast to reduce in the second half of the year from the first half levels due to lower sales volumes and product mix which reflect a lower global demand for higher value product. The second half will also not benefit from the additional one-off sales volumes during the first half of the year, associated with the sale of offshore inventory. Production volumes in the second six month period have been reduced in line with the lower sales volumes and to reduce stock levels. Lower production volumes have affected the trading profit due to the under recovery of overheads. Profit has been enhanced by the reversal of R64.4 million of a rehabilitation provision previously established for the Australian Kooragang Island waste disposal site. An amendment to the Environmental Protection Licence governing the site allows a more cost effective rehabilitation process for the site. Environmental clearance has also been obtained for the Australian main site, which now has no rehabilitation requirement. As a result profit will be further enhanced by the reversal of a R10.7 million rehabilitation provision. Cash flow in the second half of the year is forecast to be lower than the first half, which benefited from the collection of substantial year end trade balances associated with Australian trade debtors, the change in terms of sale and the collection of outstanding receivables from a substantial customer. Cash balances at year end are however forecast to be in excess of R200 million, having paid special dividends of R245.8 million and secondary taxation on companies of R24.6 million thereon. Efforts to dispose of the Group`s Australian plant main site and Kooragang Island site continue and disposals will be announced when agreed. Following the Group`s 2005 disposal of its industrial services businesses, a Group subsidiary company discontinued business and filed final tax returns. A tax assessment received by the subsidiary company during 2007 resulted in a tax refund as reported in the Group`s 2007 accounts. Thereafter the subsidiary company satisfied its outstanding liabilities and distributed its assets. A revised assessment of R32 million has recently been issued by SARS for additional capital gains taxation in respect of the 2005 disposal. The Group will object to the revised assessment, and no provision has been raised for this revised assessment. Earnings and headline earnings after taxation for the twelve months ending 27 December 2009, inclusive of the secondary taxation on companies paid of R24.6 million in respect of the two special dividends paid during 2009 and inclusive of the R75.1 million write back of the Australian Kooragang Island and main site rehabilitation provisions are forecast to be as follows: Earnings after taxation between R151 million and R169 million (2008: R89.4 million) Headline earnings after taxation between R148 million and R166 million (2008: R90.4 million) Earnings and headline earnings per share for the twelve months ending 27 December 2009 are forecast to be as follows: Earnings per share between 308 cents and 344 cents (2008: 182.6 cents) Headline earnings per share between 302 cents and 338 cents (2008:184.5 cents) Excluding secondary taxation on companies of R24.6 million (2008: R5.2 million) relating to special dividends and the Australian closure provisions written back of R75.1 million (2008: R28.9 million charge), earnings after taxation are forecast to be between R97 million and R121 million (2008: R123.5 million) and earnings per share between 198 cents and 247 cents (2008: 252 cents); and Headline earnings after taxation are forecast to be between R94 million and R118 million (2008: R124.5 million) for the twelve months ended 27 December 2009 and headline earnings per share between 192 cents and 240 cents (2008:254 cents). The lower forecast underlying earnings and headline earnings compared with 2008 referred to above relate to lower forecast interest income, exchange losses associated with a stronger Rand exchange rate and certain sundry gains realised in 2008, not repeated in 2009. The forecast financial information on which this trading statement is based has not been reviewed and reported on by the Group`s auditors. Nelspruit 19 November 2009 Sponsor RAND MERCHANT BANK (A division of FirstRand Bank Limited) Date: 19/11/2009 07:05:06 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
