Irish cement maker Readymix said today it expects to report a loss of approximately €10 million for the first half as revenues fell by 12 per cent.
Readymix shares fell over 6 per cent to €0.75 by 9.25am in Dublin trading after the statement was released. Readymix stock has fallen over 53 per cent so far this year.
Readymix, which is controlled by Cemex SA, said €2.7 million of the loss was due one-off costs for “reshaping” the business and that it had reduced its workforce by 15 per cent as residential construction contracts.
These cost cutting measures and asset sales may help the company report a profit for the full year, it said. “Readymix expects very difficult trading conditions for the remainder of the year”.
it will report a first-half operating loss, excluding one-time items, of €7 million ($11 million), Readymix said in a statement.
“Infrastructure projects, have not compensated for the decline in the housing sector, and margins will continue to come under pressure from higher fuel and energy costs.”
Adrian Auer, Readymix chairman said the company was facing "very tough trading conditions" across all markets but stressed that the company had a strong cash position and “portfolio of debt free operating assets”.
“We will continue to focus our capital investment on improving operating efficiency in our core product lines, whilst also driving down operational overheads", he said.
This guidance is being issued by Readymix plc in advance of its half year results for the period ending 30th June 2008, which will be announced on 15th August 2008.
Davy analyst Flor O’Donoghue said in a note to investors that on the basis of the first half losses it would be reviewing its forecast for a full-year pretax profits of €6 million.
NCB stockbrokers said in a equity news update that the outlook was grim and it was sceptical about the Group’s projected annual profit.
Additional reporting Bloomberg
