Rare Earths Global issues profit warning

Shares in Rare Earths Global (REG) plunged by more than a fifth on Tuesday morning after the group admitted it will not meet expectations for the year ended December 31st 2012 and as a result expects to report a normalised loss for the twelve month period.

Shares in Rare Earths Global (REG) plunged by more than a fifth on Tuesday morning after the group admitted it will not meet expectations for the year ended December 31st 2012 and as a result expects to report a normalised loss for the twelve month period.

The company said this was due to the period of rapid change and development occuring in the Rare Earth industry both domestically in the People's Republic of China (PRC) and internationally, which has caused uncertainty. There has also been a steep decline in rare-earth prices by as much as 60% since the start of 2012.

"This uncertainty has lead to significant delays in REG receiving its production quota and not receiving an export quota at all in 2012," the group said.

"This has severely hampered the ability of the group's separation plant and trading divisions to carry out its strategy. In addition, given the current uncertainty, the board has not been able to progress its discussions with Credit Suisse regarding its proposed US$50 million debt facility.

"The board continues with the strategy as set out at the time of the company's flotation on AIM which now includes numerous potential opportunities regarding possible joint ventures which would provide the optimum approach to carrying out this stated strategy."

REG stressed that it continues to believe that the demand for rare earth oxides for new applications will continue to grow and the demand will return to previous levels. It added that it anticipates that the long term outlook for the price of rare earth oxides is positive.

The share price fell 21.57% to 200p by 08:47 on Tuesday.

NR

Recommended

The top funds to invest in now
Funds

The top funds to invest in now

As market volatility continues, here are the top funds, stocks and investment trusts investors are putting their money into, according to one investme…
2 Dec 2022
7 sin stocks to buy yielding up to 8%!
Share tips

7 sin stocks to buy yielding up to 8%!

Sin stocks don’t have the best reputation, but when it comes to investment returns, they’re certainly worth a closer look.
2 Dec 2022
Share tips of the week – 2 December
Share tips

Share tips of the week – 2 December

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
2 Dec 2022
3 emerging-market stocks to watch
Share tips

3 emerging-market stocks to watch

The top emerging-market stocks to keep an eye on, according to Union Bancaire Privée’s Eli Koen.
1 Dec 2022

Most Popular

Is it cheaper to leave the heating on low all day?
Personal finance

Is it cheaper to leave the heating on low all day?

The weather is getting colder and energy bills are rising, but is it really cheaper to leave the heating on low all day or should you only turn it on …
1 Dec 2022
Radiator vs electric heater – which is cheaper?
Personal finance

Radiator vs electric heater – which is cheaper?

We compare the costs, pros and cons of radiators and electric heaters and see which one will help keep your energy bill as low as possible.
28 Nov 2022
The pros and cons of smart meters – should you switch?
Personal finance

The pros and cons of smart meters – should you switch?

A smart meter can help you keep tabs on your energy usage, but is it better than a regular meter? We take a look at smart meters vs regular meters.
2 Dec 2022