 |
 |
||||||
[March 2008]
Power Outages Affect Results for Ceramic Industries Ltd
Ceramic Industries Ltd in South Africa encountered difficult trading conditions during the six months ended 31 January 2008. Consumer spending was negatively impacted by interest rate hikes as well as increasing inflation. As a result, the Group experienced lower demand for its products and demand shifted towards Ceramic Industries’ more commoditised products, which carry lower margins.
The Group benefited from its ongoing efforts to produce fashionable products with higher selling prices but was unable to fully recover substantial increases in energy, packaging and other oil related costs. These circumstances were exacerbated by the power interruptions in December 2007 and January 2008 which resulted in increased scrap rates, decreased yields and lower plant efficiencies.
Revenue increased by 6.6% to R701 million (2007: R657.3 million). Revenue from tiles increased by 9.8% with reported revenue of R573.9 million (2007: R522.5 million). The Group achieved record tile sales of 17.7 million square metres (2007: 16.9 million sq.m.).
Sanitaryware revenue declined by 5.7% to R127 million (2007: R134.8 million). Sales volumes of Ceramic Industries sanitaryware pieces declined from 0.690 million pieces to 0.653 million pieces largely as a result of the 50% reduction in capacity at the Betta factory during January 2008 caused by power failures. The contribution from the bath factories which sold 75,000 baths (2007: 79,000) was disappointing due to problems experienced in bedding down the new technology at the Aquarius factory.
Operating profit showed a decrease of 18.7% to R112.7 million (2007: R138.5 million) as the Group absorbed significant increases in costs plus the waste and inefficiencies inflicted by the power outages during December 2007 and January 2008.
Headline earnings declined by 19.0% to R79.2 million (2007: R97.8 million) with reported headline earnings per share of 460.2 cents (2007: 565.4 cents), a decrease of 18,6%.
www.ceramic.co.za
ENDS