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DTA - Delta EMD Limited - Trading statement for the year ending 28 December 2010 and further cautionary announcement 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 FOR THE YEAR ENDING 28 DECEMBER 2010 and FURTHER CAUTIONARY ANNOUNCEMENT TRADING STATEMENT Delta shareholders are referred to the announcement released on SENS on 17 August 2010 relating to its unaudited results for the six months ended 27 June 2010 and the comments on prospects contained therein. Global economic conditions continue to limit demand for alkaline batteries with a corresponding contraction of global demand for alkaline grade EMD. The market is not expected to recover before 2011. Further, the continued strength of the Rand against the US Dollar, EURO and Yen has made Delta`s alkaline grade EMD selling prices less competitive and consequently Delta`s alkaline grade EMD sales have reduced and are not expected to improve as earlier anticipated. The Group`s 2010 second half sales volumes are now expected to be lower than during both the first half of 2010 and the second half of 2009 and will include less alkaline grade EMD sales volumes, thereby affording a less attractive sales mix. Operating profit for the second half of 2010 will be reduced by lower sales volumes, a less favourable sales mix, and limited production and also will not include the additional contribution provided from the one-off high margin lithium EMD sales made during the second half of 2009 and first half of 2010. Earnings after taxation for the full year ending 28 December 2010 will include R14.7 million of secondary tax on companies paid in connection with the Group`s special dividend as well as the R56.6 million of profit realised on the disposal of the Kooragang Island residue disposal site, and are now forecast to be between R116 million and R127 million (2009: R167 million). Headline earnings after taxation for the full year ending 28 December 2010, including the STC paid but not the profit realised on disposal of the residue disposal site, are forecast to be between R60 million and R71 million (2009: R158 million). Earnings per share for the full year ending 28 December 2010 are forecast to be between 236 cents and 258 cents (2009: 341 cents), and headline earnings per share for the full year ending 28 December 2010 are forecast to be between 122 cents and 144 cents (2009: 323 cents) North American EMD market conditions are unlikely to sustain Delta EMD`s historic sales volumes in that market until the successful commercialisation of the Group`s premium grade product. Consequently the Group expects sales volumes and sales mix for the near future to be broadly in line with those of the second half of 2010. The forecast financial information on which this trading statement is based has not been reviewed and reported on by the Group`s auditors. Delta`s results for year ending 28 December 2010 are expected to be released on SENS on 22 February 2011. FURTHER CAUTIONARY ANNOUNCEMENT Shareholders are referred to the cautionary announcement released on SENS on 18 January 2010, and the subsequent related cautionary announcements, wherein shareholders were advised that the Company has commenced a process intended to realise value from its last remaining operation, being Delta EMD South Africa, which process might result in the disposal of that operation. Further to the aforementioned announcements, shareholders are advised that the process is ongoing and might have a material effect on the price of the Company`s securities and should continue to exercise caution when dealing in the Company`s securities until a further announcement is made. Nelspruit 29 September 2010 Merchant bank and sponsor RAND MERCHANT BANK (A division of FirstRand Bank Limited) Legal advisor Webber Wentzel Attorneys Date: 29/09/2010 11:10:26 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.
