Profit warnings rise: Ernst & Young

Ernst & Young says profit warnings from listed Australian companies are at record levels with between 80 to 90 warnings expected during the second half of 2002-2003. E&Y's latest Profit Warnings Watch states that between July 1 and December 31, 2002, 77 profit warnings were issued.

E&Y says the major factors were the drought and the economic slowdown with these factors unlikely to ease over the next six months. A war with Iraq would exacerbate conditions as well as the ASX's new disclosure rules.

Over the first-half survey period, manufacturing and food companies issued the most profit warnings followed by the finance and insurance sectors and the mining industry. Agriculture companies showed the biggest increase in the number of warnings and this is likely to continue in the second half, with wine and food firms also likely to be affected over the next six months.