Published Monday, August 20, 2007, by Western Australia Business News

ERG predicts $15m net loss for 2006-07

Balcatta-based transport systems group ERG Ltd has reported progress
with its major ticketing projects but has predicted a net loss for
the 2006-07 financial year of around $15 million.

The company said that while it had generally traded as expected, a
just-completed review of the schedule for completion of its Sydney
ticketing project to accommodate additional testing meant the Company
has had to revise its estimated costs of completion for this project
as at 30 June 2007.

The full text of a company announcement is pasted below:

The ERG Limited Board wishes to provide an update on the progress of
its major projects and financial results for the year ended 30 June
2007.

Golden Gate and AC Transit announce plans for full launch

The TransLink® project in San Francisco has nearly 10,000 smart cards
in circulation with commuters from Golden Gate Transit and AC Transit
taking over 100,000 trips per month. On September 17th these
Operators will proceed with a full launch campaign with extensive
media coverage. ERG anticipates system usage to grow quickly to
50,000 commuters. The two largest transit operators "BART"
and "SFMTA" are now in advanced stages of system testing together
with "Caltrain" and current plans are for commercial operation for
all three operators to commence at the beginning of 2008. The system
is being tested to handle over 400,000 trips per day based on
estimated system usage following full launch.

Stockholm rail network in operation and bus system ready for launch
by end of 2007

The rail network in Stockholm comprising over 1200 gates has been
successfully upgraded for both magnetic and smart card capability.
The ERG back office processing system is now managing over 300,000
transactions per day for the rail network. The bus system including
point of sale units at retail outlets and hand-held inspection
devices has conducted site acceptance testing. The customer,
Storstockholms Lokaltrafik ("SL"), is planning to commence public
launch of the system in late 2007 following successful completion
of an operational trial about to commence.

Public trial successful in Seattle

The 7 transit agencies together with ERG have completed a public
trial for the smart card ticketing system with 3,000 participants.
Additional functionality is now being developed prior to full system
operations planned for the second half of 2008.

Limited trials continue in Sydney in preparation for public
participation

Limited trials for both bus and rail are continuing in Sydney.
The Bus trials include both magnetic card and smart card ticket
capability with ERG currently processing over 100,000 transactions
per day. ERG is working with the customer, the Public Transport
Ticketing Corporation ("PTTC") and is committed to resolve the
remaining minor technical issues prior to entering a public trial
for smart card functionality. ERG believes this will be ready in
September 2007.

The rail trial at Ashfield station using magnetic card tickets has
been running for several months. Average daily usage is currently
25,000 transactions, issuing 1,200 tickets collecting $10,000 cash.
Preparations for smart card ticketing are now in witness testing. To
ensure high levels of system quality prior to any broad scale public
trial a proposal has recently been submitted to the customer to
increase the depth and coverage of testing. This will delay the
planned start of a broad based public trial on the rail system until
the beginning of 2008. This public trial, including performance
evaluation and system tuning, will be conducted over a 6 month
period. The full scale deployment of bus and rail equipment will
then take a further 12 months to complete.

Other projects together with the Company's Small Projects division
and Operating Companies division continue to trade in line with
expectations.

Substantial improvement in Company financial performance

The overall progress on these projects will translate to substantial
improvement in the Company's financial performance in the year ended
30 June 2007 compared to the prior financial year. The Company has
provided previous guidance that during the year ended 30 June 2007
it would generate earnings before interest tax, depreciation and
amortisation ("EBITDA") of up to $5 million which after depreciation,
interest costs and outside equity interests will translate into a
net loss of up to $10 million. In addition it expected to be cash
positive during the 2007 financial year.

EBITDA expected to meet expectations but Net Profit forecast
downgraded from loss of $10 million to loss of $15 million

Whilst the Company's trading performance was generally in line with
its expectations during the year a just completed review of the
schedule for completion of the Sydney project to accommodate
additional testing has meant that the Company has had to revise its
estimated costs of completion for this project as at 30 June 2007.
Consequently, while EBITDA for the Group for the year ended 30 June
2007 is still expected to be approximately $5 million, when combined
with higher than expected financing costs due to delays in receipt of
some milestone payments, the Company now expects to report a net loss
after tax of approximately $15 million

Second half year cash positive with both cash and EBITDA improvement
anticipated for year ending 30 June 2008

The company cash flow from operations was positive for the half year
just completed but slightly negative for the full year ending 30 June
2007. Full details will be included in the Company's preliminary
final report to be released on 24 August 2007. The company
anticipates continued improvement in EBITDA and cash flow in the year
ending 30 June 2008.


[BATN: See also:

Editorial: Optimistic despite endless TransLink delays, overruns
http://groups.yahoo.com/group/BATN/message/35804

TransLink faces another major delay, again
http://groups.yahoo.com/group/BATN/message/35778

Defects again delay TransLink debut
http://groups.yahoo.com/group/BATN/message/35777

Muni hopes to ease TransLink deployment with extra supervisors
http://groups.yahoo.com/group/BATN/message/34686

20 years later, TransLink set to launch (15 Feb 07)
http://groups.yahoo.com/group/BATN/message/33754

Much-touted TransLink card finally hits transit scene (12 Feb 07)
http://groups.yahoo.com/group/BATN/message/33693

TransLink boondoggle delayed for Caltrain (2 Feb 07)
http://groups.yahoo.com/group/BATN/message/33540

MTC "delighted" Translink contractor still solving big problems
http://groups.yahoo.com/group/BATN/message/33372

TransLink trial stalled by AC Transit farebox problems (16 Jan 07)
http://groups.yahoo.com/group/BATN/message/33304

Column: Big setback for late, overbudget TransLink boondoggle
http://groups.yahoo.com/group/BATN/message/33267

TransLink transit fare-payment system launched (17 Nov 06)
http://groups.yahoo.com/group/BATN/message/32902

After overruns, delays, TransLink finally ready for ... a test
http://groups.yahoo.com/group/BATN/message/32726

After delays, huge overruns, Translink to make limited debut
http://groups.yahoo.com/group/BATN/message/32705

TransLink(tm)(c) trial on BART
http://groups.yahoo.com/group/BATN/message/32578

BART TransLink(tm)(sm)(c)(r) trial to start
http://groups.yahoo.com/group/BATN/message/32568

Editorial: We hope TransLink works -- we need something like it
http://groups.yahoo.com/group/BATN/message/31818

SamTrans gets $297k grant for new TransLink-able fareboxes
http://groups.yahoo.com/group/BATN/message/31792

Long-delayed TransLink to get small-scale 2nd trial in fall
http://groups.yahoo.com/group/BATN/message/31737

MTC TransLink® costs double _again_ as system idles (30 May 06)
http://groups.yahoo.com/group/BATN/message/30951

Another day, another ERG (TransLink(tm) contractor) delay
http://groups.yahoo.com/group/BATN/message/30700

Letter: MTC should kill TransLink boondoggle
http://groups.yahoo.com/group/BATN/message/29054

Translink coming to GG Transit sometime this year ... or next
http://groups.yahoo.com/group/BATN/message/28861

MTC plans TransLink rollout despite lingering questions (6 Jan 06)
http://groups.yahoo.com/group/BATN/message/28216

BART pays Cubic $3.4m to add TransLink® to TVMs (9 Nov 04)
http://groups.yahoo.com/group/BATN/message/21249

MTC moves ahead with TransLink RFID "smart cards"
http://groups.yahoo.com/group/BATN/message/21079

BART awards $7m TransLink® deal to Cubic
http://groups.yahoo.com/group/BATN/message/16513

TransLink® to roll out slowly, one system at a time (8 Dec 03)
http://groups.yahoo.com/group/BATN/message/15320

MTC TransLink® fare card soon to be a reality (25 Nov 03)
http://groups.yahoo.com/group/BATN/message/15094

ERG awarded $150M, 13-year MTC TransLink® deal (20 Nov 03)
http://groups.yahoo.com/group/BATN/message/14998

ERG Press Release: MTC OKs TransLink® for roll-out (20 Nov 03)
http://groups.yahoo.com/group/BATN/message/14997

BART votes to join TransLink "smart ticket" plan (26 Sep 03)
http://groups.yahoo.com/group/BATN/message/13976

BART board votes to embrace TransLink farecard (26 Sep 03)
http://groups.yahoo.com/group/BATN/message/13975

TransLink-like smart cards can track commuters
http://groups.yahoo.com/group/BATN/message/13967

MTC votes to deploy TransLink with or without BART (25 Sep 03)
http://groups.yahoo.com/group/BATN/message/13963

MTC TransLink costs double, delays accumulate (22 Sep 03)
http://groups.yahoo.com/group/BATN/message/13908

Editorial: MTC TransLink fare card must not fail
http://groups.yahoo.com/group/BATN/message/13638

BART balk stalls TransLink farecard plans (2 Sep 03)
http://groups.yahoo.com/group/BATN/message/13555

BART rejects TransLink deal, seeks more assurances (30 Aug 03)
http://groups.yahoo.com/group/BATN/message/13509

BART holds out for stronger TransLink concessions
http://groups.yahoo.com/group/BATN/message/13493

TransLink universal fare card clears "last" hurdle (28 Aug 03)
http://groups.yahoo.com/group/BATN/message/13461

MTC meets BART TransLink demands, Muni deal close
http://groups.yahoo.com/group/BATN/message/13439

BART threatens to pull out of TransLink program
http://groups.yahoo.com/group/BATN/message/13277

BART concern may kill MTC TransLink fare-card plan
http://groups.yahoo.com/group/BATN/message/13192

BART demands separate BART TransLink fare account (25 Jul 03)
http://groups.yahoo.com/group/BATN/message/12992

Cost, compatibility issues stall MTC TransLink card (24 Jul 03)
http://groups.yahoo.com/group/BATN/message/12976

MTC to roll out TransLink fare-card program (27 Mar 03)
http://groups.yahoo.com/group/BATN/message/11253

Comment: MTC's Heminger says MTC's TransLink good (11 Oct 02)
http://groups.yahoo.com/group/BATN/message/8794

BART accord reached on MTC TransLink cards (12 Oct 02)
http://groups.yahoo.com/group/BATN/message/8774

MTC chief seeks to keep BART in TransLink trial
http://groups.yahoo.com/group/BATN/message/8304

BART may temporarily leave MTC TransLink trial
http://groups.yahoo.com/group/BATN/message/8302

MTC expands TransLink regional fare payment test (20 Mar 02)
http://groups.yahoo.com/group/BATN/message/5691

TransLink universal fare card debuts in Bay Area (3 Feb 02)
http://groups.yahoo.com/group/BATN/message/4923

MTC TransLink farecard debuts today in Bay Area (1 Feb 02)
http://groups.yahoo.com/group/BATN/message/4910

MTC debuts TransLink universal transit farecard
http://groups.yahoo.com/group/BATN/message/4895

MTC TransLink transit pass almost ready for test (10 Dec 01)
http://groups.yahoo.com/group/BATN/message/4024

TransLink pass a hassle-free ticket to discovery
http://groups.yahoo.com/group/BATN/message/4022

MTC TransLink fare card works well in debut demo (1 Dec 01)
http://groups.yahoo.com/group/BATN/message/3901

MTC officials debut TransLink smart card today (30 Nov 01)
http://groups.yahoo.com/group/BATN/message/3888

FTA chief announces Bay Area TransLink card test
http://groups.yahoo.com/group/BATN/message/3887

MTC "TransLink" transit smart card pilot coming (18 Jan 01)
http://groups.yahoo.com/group/BATN/message/381 ]