Orbital points to slow first half...

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Auto parts company Orbital Engine Corporation Ltd says the first half of 2005/06 is unlikely to better the first half of 2004/05 as revenue from powertrain engineering services continues to slide.

Orbital said it was hopeful that the full year performance would surpass the 2005 financial year when the company reported a loss of $1.1 million.

"While we remain hopeful of producing a better performance in the 2006 financial year, at this state the first half result is unlikely to be better than the corresponding half in the 2005 financial year," chairman Don Bourke said.

Orbital reported a net loss of $1.5 million on revenue of $5.4 million in the first half of 2004/05.

He said the workload from traditional automotive sources had severely contracted and the company had started focussing on new revenue streams.

One new program was to seek engineering fees for service work from emerging markets, in particular India and China.

Mr Bourke said the new program had met some success in both countries, but was yet to finalise a major sale.

"We believe that we have a number of competitive advantages in dealing with these emerging markets - particularly our flexibility and skill base, together with our non-alignment to any specific manufacturer," Mr Bourke said.

New chief executive Rod Houston said growth from Orbital's joint venture with electronic engine management systems, Synerject, would also come from China and India.

"The strategic goal for Synerject is to grow from today's annual sales of $US43 million to over $US200 million by 2010," he said.

Synerject would need to invest in new products, launch production in Asia and consider new alliances to underpin this sales growth.

Increasing fuel costs had also reignited interest in alternate fuels and Orbital was confident it was well placed to take advantage of new opportunities emerging.

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