Earnings Upgrade

Wellington Drives Technologies Limited (Wellington) is experiencing stronger than expected sales and forecast order inflow. The Company's full-year 2021 revenue guidance was previously in a range of US$37m to US$42m, and EBITDA of NZ$2.0m-2.5m, with a modest pre-tax loss. This guidance is now being raised to full-year revenue between US$40m and US$43m, EBITDA between NZ$2.5m and NZ$3.0m, and a modest net profit. It should be noted that the US$/NZ$ exchange rate is currently providing a modest head wind to earnings. Wellington has adequate financial resources, including existing bank facilities, on the current outlook. While customer demand indications are strengthening it is unclear the extent to which this might represent: o a catch-up from 2020 demand weakness; o front-end loading of 2021 customer demand; or o sustainable recovery in customer demand, including normal levels of factory operation and capital expenditure. The increasing order flow and customer forecast increases does provide a higher degree of certainty around Wellington's first and second quarter operating forecast and, subject to previously disclosed COVID-related risks, suggests the Company should report a net profit for the first half of the year. Wellington's 2020 Annual Report is expected to be released by 26 February. EBITDA (i.e. Earnings before interest, taxation, depreciation, amortisation and impairment) is a non-GAAP earnings figure that equity analysts tend to focus on for comparable company performance analysis. Wellington considers that it is a useful financial indicator because it avoids the distortions caused by differences in amortisation and impairment policies. End CA:00368082 For:WDT Type:GENERAL Time:2021-02-24 09:42:52