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18 Janaury 2008
EARNINGS GUIDANCE AND BUSINESS
UPDATE
PERTH, AUSTRALIA:
Orbital Corporation Limited today provides guidance on the financial
results for the half year ended 31 December 2007 in conjunction
with a business and product update.
Earnings Guidance
At the Annual General Meeting in October 2007 Orbital reported a
weak 1st quarter primarily as a result of the reduced engineering
order book at the beginning of the financial year. We also noted
an improved order intake and this has resulted in increased engineering
revenue in the 2nd quarter with a corresponding improvement in earnings.
Orbital has previously reported that the Synerject
result in this financial year will be affected by start up costs
in China. These are not, however, as high as anticipated and this
together with efficiency gains realised at Synerject's Delavan plant
has resulted in a better than plan equity accounted share of Synerject's
result, particularly in the 2nd quarter.
We anticipate that the net loss for the half
year will be in the range $300k to $500k (subject to auditor's review)
compared with a loss in the corresponding period last year of $429k.
In the half year ended 31 December 2006 the reported loss included
costs of $582k with respect to settlement of a legal dispute with
Coles Myer Limited.
Business and Product Update
Over the last few months we have continued
to see a shift in the regulations and customer attitudes towards
cleaner and more efficient energy solutions. The passage of new
stricter CAFE (corporate average fuel economy) regulations in the
US will spur the adoption of fuel saving technology across the industry.
In addition the more intense discussions on if and when peak oil
production will occur is creating many new opportunities in the
area of alternative and renewable fuels such as ethanol and gaseous
fuels.
Orbital has positioned itself as a supplier
of clean energy solutions to exploit the opportunities provided
in this new landscape of global warming concerns, energy utilisation
and sustainability. In particular the launch of the new FlexDI "One
engine-Any fuel" product at the end of October has started
to deliver a wider range of customers and opportunities, evidenced
by our increased order book.
Further evidence of the future business opportunities
is the various product launches and awards being achieved for Orbital
services and technology, including:
- The Kymco KDI X-Mode 100 scooter utilising
the Orbital Direct Injection combustion process has been judged
by the Taiwan Environmental Protection Agency (EPA) as the best
motorcycle in their green motorcycle ranking.
- BRP have recently introduced the early launch
of a new snowmobile the SkiDoo MXZ TNT 600 E-TEC which will be
a boost to future sales for Synerject from the Delavan plant which
manufactures the E-TEC components.
- Polaris has incorporated the recently released
Orbital Direct Injected Patriot engine in another vehicle the
Polaris RANGER utility vehicle.
- Bajaj has increased promotion and
marketing of the DI Autorickshaw and clarified plans for the roll
out of this product and technology in India.
Orbital plans to release its detailed half
year results on 20th February 2008 at which time a comprehensive
commercial update will be provided together with an outlook for
the 2nd half and full year.
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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