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Wellington Drive says profit in 2013 'challenging', seeks funding partner

Wednesday 29th August 2012

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Wellington Drive Technologies, which makes energy-efficient motors, narrowed its first-half loss and said achieving a profit in 2013, its first since listing in 2001, will be "challenging" given the weak outlook for Europe

The Auckland-based company had flagged the prospect of positive earnings before interest, tax, depreciation and amortisation in 2013 at its annual meeting in May and said today that target "remains our objective."

The net loss in the six months ended June 30 narrowed to $3.29 million, from a loss of $6.99 million a year earlier, Wellington Drive said in a statement. Sales jumped 23 percent to $22.3 million, outpacing an 11 percent gain in cost of sales. Operating expenses fell to $5 million from $6.3 million.

The ebitda loss of $1.9 million was down from $6 million in the first half last year. The ebitda loss for the second half is forecast at $2.5 million.

The company said its forecasts show it has enough cash to continue to operate for the next 12 months though there were "significant risks to these forecasts" and it has begun to look for "a strategic partner who will invest in the business."

"Demand from our European customers weakened during the first half and we continue to experience poor demand visibility from this market," it said.

Latin America demand "was strong" in the first half but some signs of weakness were emerging toward the end of the second quarter and forecast full-year revenue would be $35 million to $38 million, below its previous forecast of $40 million.

Shares of Wellington Drive last traded at 14 cents, valuing the company at $9.4 million. The stock has fallen from as much as $7.38 in late 2007.

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