Johannesburg – International marketer of decorative, automotive and industrial coatings Freeworld Coatings (FWD), which has a presence in Port Elizabeth, yesterday reported a 34% fall in its earnings per share for the full year from 105 cents to 70 cents in the year to end September 2009.

Net profit fell 32% to R147-million from R216,9-million a year ago.

The company declared a final dividend of 7 cents a share, bringing the total dividend to 12 cents a share.

Freeworld Coatings said the uncertainty and increased volatility in financial markets and in particular currency markets had had a significant impact on the group’s result.

Revenue from operations for the financial year to September at R2,7-billion was in line with that achieved last year while earnings before interest, taxes, depreciation and amortization, excluding fair value adjustments on financial instruments at R425-million, was 5% down on last year’s record result of R449-million.

“Input costs remained at relatively high levels for the most part of the year, and with market conditions being difficult, prices were held firm and not increased, with costs being absorbed so as not to further impact demand,” the company said.

The company has a long established policy of taking forward cover for imported raw materials and capital expenditure items but the strengthening of the rand resulted in the company recording a mark to market fair value loss on financial instruments of R26,2-million as against last year’s profit of R15,4-million.

Operating profit at R322-million is 19% down on last year due to a 5% lower trading result, a R9-million higher depreciation charge as a consequence of the capex programme, and the negative mark to market fair value adjustments on financial instruments.

Income from associates more than halved to R8,6-million from last year’s after tax income of R22,4-million.

A major contributor to the shortfall was the performance of DuPont Freeworld, which supplies original equipment manufacturers’ paint products, as it was severely impacted by the motor manufacturers cutting back significantly on unit builds.