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| Subject: we don't expect to be (net profit) positive in the full 2003 year," said Fogarty. | |
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Author: Thursday 12 September 1:35 PM(Reuters) |
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Date Posted: 01:22:26 01/19/03 Sun Thursday 12 September 1:35 PM UPDATE 1-ERG sees revenue rise after "shocking" yr ADVERTISEMENT SYDNEY, Sept 12 (Reuters) - Australian smart card systems developer ERG Ltd said on Thursday its full-year net loss was a "pretty shocking" A$243.88 million and it would likely remain in the red in 2002/03. Blaming contract delays for the steep loss, which included A$165 million in one-off charges, ERG tipped 10-20 percent current year revenue growth, climbing to 40-50 percent in the following year as new contracts kicked in. "In the second half the figures have all basically improved, but it's still a pretty shocking full-year result," chief executive Peter Fogarty told a briefing. ERG said a delay in project timing had a negative A$50-100 million impact on the result, which plummetted from a A$6.1 million profit a year ago. New projects in Sydney, Seattle and San Francisco were expected to come on stream soon and the group was involved in bidding for contracts in Canada, The Netherlands, Sweden and the United States. The group said it was targetting a positive earnings before interest, tax, depreciation and amortisation (EBITDA) result for the current year, but net profit was unlikely. The group said in March, when it posted a first-half loss of A$199.4 million, that it expected to be profitable in the second half of 2001/02 and in 2002/03. "Given the level of depreciation and amortisation, we don't expect to be (net profit) positive in the full 2003 year," said Fogarty. "We're looking for EBITDA positive and cash flow positive contributions from operations," he said, adding interest, depreciation and amortisation charges would be around A$70 million. Stripping out writedowns, ERG said it posted a A$2.3 million EBITDA positive second-half result. Shares in ERG last traded a cent firmer at 24 cents in a flat broader market, but are 56 percent under their 55 cent year high struck in January. ERG, which said it needs to bolster its balance sheet, has secured around A$100 million in financing to fund its Sydney project and would convert some of its outstanding notes to equity in a bid to cut funding costs. After slashing around 350 staff from its payroll to help cut costs by A$40 million last year, ERG said it hoped to make further cost savings in the year ahead. The group said it would consider trying to find a "big brother" overseas investor to take a sizeable equity stake to help it fend off what it described as negative local press coverage and dirty tricks by its competitors. ($1=A$1.82) [ Next Thread | Previous Thread | Next Message | Previous Message ] |