One-off costs and several unexpected plant interruptions adversely affected Penrice Soda Holdings“s half-year profits. Shares in the Adelaide-based soda ash and sodium bicarbonate firm dropped 13.2% …
One-off costs and several unexpected plant interruptions adversely affected Penrice Soda Holdings“s half-year profits. Shares in the Adelaide-based soda ash and sodium bicarbonate firm dropped 13.2% to AUD 1.77 on 27 February 2007 after Penrice said net profit for the six months to 31 December 2006 fell from AUD 4.4 million to AU 2.3 million, despite an 8% rise in revenue. The Penrice board said a 6-12% fall in full-year net profit would be the likely consequence of the one-off costs and the plant interruptions. Subtracting the one-off costs, the company would have posted a net profit of AUD 4.56 million. The costs included those associated with the resignation of the former chief executive and the appointment of new boss Guy Roberts, extended maintenance at the Osborne plant during the annual shutdown in August 2006 and additional, less profitable soda ash imports needed to supplement interrupted local production. The company said while taken individually the plant shutdowns were not significant, the cumulative effective was. Mr Roberts said he had conducted a thorough review of the Osborne plant“s operations in recent weeks in a bid to eliminate the problem. “The Penrice Board has approved a plan to substantially improve the reliability and overall performance of the plant”, he said. “The plan is aimed at improving reliability in the short term and, following renewed investment in the Osborne plant, productivity gains should be delivered in the longer term”. Chairman John Heard said soda ash prices would rise in the 2H, however the company was experiencing strong competition from importers due to the strong Australian dollar. The company will pay a fully franked AUD 0.05 interim dividend on 30 April 2007, down from AUD 0.07.