Penrice Soda shares slip on loss prediction

Shares in Australian soda ash maker Penrice Soda plummeted 12% to a record low as it forecast a loss this year. The Osborne-based manufacturer stated it would slash its previous full-year forecast pro…

Shares in Australian soda ash maker Penrice Soda plummeted 12% to a record low as it forecast a loss this year. The Osborne-based manufacturer stated it would slash its previous full-year forecast profit of AUD 5.3 million to an after-tax loss of between AUD 500,000 and AUD 1.5 million. This was partly blamed on the Queensland floods, which had dented demand, and a high Australian dollar, which had eroded export revenues. A company representative said the earnings disruptions experienced this year are considered unusual, one-off and unlikely to recur, and that their impact would not extend beyond the current financial year end. Compounding the loss was a sudden dip in demand from two major soda ash customers this quarter plus the timing and extent of recovery of a major insurance claim. The company claims that one major customer was forced to shut its chemicals plant and had brought forward a major refurbishment at short notice, while another was substituting more recycled glass for soda ash. Both supply disruptions would end by July, the company stated. Penrice booked a net loss of AUD 1.2 million in the six months to 31 December, compared with a AUD 3.1 million profit previously. Company executives expect to recover a substantial proportion of the USD 3.5 million loss the company suffered after the failure of Osborne Cogeneration Company“s steam supply. A payment of AUD 400,000 from insurers had been made, but the result would not be realised until 2012 because of delayed negotiations with insurers.