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Astron Limited (ASX: ATR) Monday announced profit guidance for the year to 30 June 2008.
Astron is expecting net profit for FY08 to be approximately $128 million. This result reflects proceeds from the sale of the Astron China businesses settled on 4 February 2008, as well as a review of carrying values of remaining assets and the operating results of the sold businesses to 4 February 2008.
With the main profit generating businesses in China sold, Astron’s profit outlook for the next year to June 30 2009 is estimated to be approximately $8 million, from investment income and some trading activity, offset by overheads.
The Company’s cash position at the end of June 2008 is expected to be very strong at around $180 million.
In China, the Company purchased an industrial land site from the Government in June 2008. The 133.2ha site, to be named Astron Titanium Industrial Park, is located in the Yingkou Coastal Development Zone in Liaoning province in the North East of China.
Retention of the full land parcel requires Astron to complete development of the site, and Astron plans to do this by combining its own investments and complementary investments by third parties.
At the Astron Titanium Industrial Park, Astron will develop a Mineral Separation Plant, which was previously planned to be located in Bayushan. Also on the site, Astron intends to build a trial processing plant for the Company’s new Zirconium Opacifier “Zirpaque” plant.
These projects will be a significant step in the development and establishment of the Donald mineral sands project in Australia. The total additional investment to complete these initial projects will be approximately $30 million. Investment expenditure for the land and project expense to date on these projects is approximately $25 million.
Other planned investments by Astron in this Industrial Park are the foreshadowed TiO2 Pigment plant and Zirconium Oxy-chloride Fumed Silica plants. Environmental approvals and staffing issues are presently delaying the TiO2 project but the Company is hopeful that these issues will be resolved soon.
Construction at the Industrial Park is expected to commence later this year.
In Australia, the Donald Mineral Sands mining project is nearing the end of the Environmental Effect Statement (EES) process, with the Panel Hearing completed.
A decision to proceed with this development and its timetable will be made after completion of the EES process and the successful operation of the related Processing Plants in China.
Capital expenditure to date for this project is approximately $20 million. – Press Release