(AEFGI) Flat Glass Industries Downgrades Earnings Forecast

Due to a disappointing December half and following a review of unaudited management accounts for the three months to March 31 and forecast results for the June quarter, Flat Glass Industries Ltd (ASX:FGI) has downgraded its expectations of earnings before interest, tax, depreciation and amortisation (EBITDA) for the year ending June 30.

Given a slowdown in sales and normal seasonality affecting the June half, directors forecast EBITDA for the full year to be in the range of $2.3m to $2.6m, compared with $7.45m in 2008.

EBITDA for the six months ended December 31 2008 was $1.1m (December half 2007: $4.7m), affected by unusual factors.

Sales for the December half were 16pc below budget due to the slowdown in the economy and the delays in opening the company's new Dandenong factory.

In the March quarter sales were also below budget and directors do not expect any significant improvement in markets for the group's products during the June quarter.

The December half is usually the stronger half for the group, with the January holiday period, Easter and Anzac Day holidays affecting results for the June half.

The directors anticipate improved trading results during the 2009/ 2010 year for reasons including reduced prices for imported glass and efficiencies flowing through from new production management software at the Moorebank glass factory.