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Penrice: soda ash price rises set to boost profit

As global soda ash prices continue to rise, Australia“s Penrice Soda Holdings Ltd expects its 2005/06 net profit to be in line with its prospectus forecasts.
The soda ash producer, which listed on t…

As global soda ash prices continue to rise, Australia“s Penrice Soda Holdings Ltd expects its 2005/06 net profit to be in line with its prospectus forecasts. The soda ash producer, which listed on the Australian Stock Exchange in July 2005, reported a 2004/05 net profit of AUD 2.65 million on 7 September 2005. Earnings before interest, tax, depreciation and amortisation (EBITDA) were AUD 16.93 million for the year ended 30 June 2005, slightly up on the forecasts in the company“s prospectus. No comparable figures were available as the company, formerly Penrice No.1 Pty Ltd, was only incorporated on 21 May 2004. Penrice, which supplies 77% of Australia“s soda ash, now sees a 2005/06 net profit of AUD 10.2 million, in line with its prospectus. Penrice chief executive David Reid said the outlook for the company was positive as a global soda ash supply shortage was pushing up prices. “There“s also a tightness of supply in some parts of the world due to some plants being shut down in the past few years,” Mr Reid said. Furthermore, fast rising oil and energy costs would not affect Penrice as badly as some of its international competitors, he said. “Penrice is not totally isolated from this but it is insulated from it,” Mr Reid said. “We have a long term supply agreement with a co-generation power plant next door to us – we buy steam from them and we use steam to manufacture electricity on our site”. “We produce about 63% of our own electricity (which is) one of the reasons that Penrice is in better shape than some over the global producers of soda ash.” The company did not declare a dividend.

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