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11th
December 2008
ORBITAL - HALF YEAR EARNINGS
GUIDANCE
PERTH AUSTRALIA:
Orbital Corporation Limited (ASX: OEC - "Orbital") today
provided updated guidance on its financial results for the half
year ending 31 December 2008.
Orbital advised at its Annual General Meeting
in October that as a result of a softening of trading conditions
in a number of its, and Synerject's, key customer markets, particularly
the North American marine market it expected to post a loss in the
first half of the year; and that the full year result for 2008/09
could be a loss overall.
With the continued deterioration in global
economic and financial conditions since the Company's AGM, the Company
advises that it now expects a net loss in the first half in the
range of $2.2 million to $2.7 million and confirms the previous
guidance of a loss for the financial year.
While Orbital does not anticipate a significant
turnaround in its major customers' markets in the near term Orbital
does expect relatively improved trading in the second half - in
line with the normal seasonal trend experienced in previous years.
Notwithstanding the current difficult trading
conditions, Orbital has strengthened its financial position with
cash at 30 November 2008 increasing to $12.2 million compared with
$8.8 million at 30 June 2008.
During the first half Orbital received $2.8
million from the Federal Government, which is being used to invest
in a heavy-duty engine testing facility in Perth. Taking into account
this capital commitment, Orbital expects it has sufficient remaining
cash to support anticipated operating requirements for the foreseeable
future.
Orbital has an option to maintain its ownership
of Synerject LLC (Orbital's manufacturing joint venture with Continental
Corporation) at 50%, for a cash outlay of US$4 million. Orbital
is reviewing this option in line with overall management of capital
and operating cash requirements.
"The global slowdown has presented Orbital
and its customers with a challenging market place and we are clearly
not immune to the impact of the current financial and economic conditions"
said Orbital's CEO Terry Stinson. "We intend to manage our
costs carefully but maintain critical engineering expertise to ensure
that we stay competitive and do not forego our future strategic
opportunities".
"Under these difficult and uncertain
conditions we are in the fortunate position of having a strong balance
sheet," said Orbital's Chairman Peter Day. "Our cash position
should ensure that we can maintain our operating capability and
take up future business opportunities as they arise."
Forward Looking Statements
This release includes forward-looking statements that involve risks
and uncertainties. These forward-looking statements are based upon
management's expectations and beliefs concerning future events.
Forward-looking statements are necessarily subject to risks, uncertainties
and other factors, many of which are outside the control of the
Company, that could cause actual results to differ materially from
such statements. Actual results and events may differ significantly
from those projected in the forward-looking statements as a result
of a number of factors including, but not limited to, those detailed
from time to time in the Company's Form 20-F filings with the US
Securities and Exchange Commission. Orbital makes no undertaking
to subsequently update or revise the forward-looking statements
made in this release to reflect events or circumstances after the
date of this release.
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