Delta EMD ‘planning’ lifts earnings 340%

DELTA EMD, which makes electrolytic manganese dioxide (EMD), mainly used in dry alkaline batteries, saw its interim earnings for the half-year to June gain tremendous momentum, growing 340% from 4.3c per share to 18.9c per share.

The performance was buoyed by careful operational planning.

Market conditions in the global EMD market remained soft during the six-month period.

Market demand continued to fall short of global supply and selling prices remained under pressure, the company said in yesterday’s interim results statement.

The group's lower than planned sales volumes were offset by an improved sales mix and higher average rand-denominated selling price.

Improved operating margins provided higher earnings.

The group said last month it had resolved uncertainties surrounding changes in customers’ delivery requirements and possible port delays. As such, planned sales volumes would be increased in the second six months of the financial year to December.

Revenue for the reporting sixmonth period was recorded at R171m and was in line with R172.5m revenue for the period ended June last year.

Average per unit production costs for the period increased over the comparable period.

Input cost increases were partly offset by operational improvements and operating inefficiencies continued because of production volumes falling short of capacity. Administration costs, meanwhile, increased because of inflation as well as increased expenditure on product and market development.

Additional expenses were incurred in responding to regulatory reviews of outstanding European Union and Japanese antidumping duties.

Net cash generated by operations for the period was R21.2m, down from last year’s R32.7m.