Lower Earnings for South African Tile Maker

South Africa, Sept. 9, 2008--South African tile and sanitary ware manufacturer Ceramic Industries on Tuesday announced a 15.5 percent decline in headline earnings pershare for the year ended July 2008.

Revenue increased 6.8 percent, underpinned by a 10.5 percent increase in tile revenue.

Increased capacity at the group's Pegasus and Centaurus factories facilitated increased tile sales of 36.2 million square meters despite muted consumer demand.

"South Africa has proven not to be immune from the difficult conditions in the global economy brought on by the subprime crisis in the United States and inflationary pressures caused by increasing commodity prices," said CEO Nick Booth.

Higher interest rates, coupled with higher food and energy prices, has put pressure on consumers' discretionary expenditures. Pressure on costs, combined with negative consumer sentiment, created difficult trading conditions for Ceramic Industries, with reduced demand for both tiles and sanitaryware, he said.

The Pegasus factory, which competes head on with Chinese imports, achieved a 12.4 percent increase in production to 14.6 million sqare meters even though the factory was not operated at full capacity.