Fenner warns as commodities' decline hits volumes

Engineer Fenner warned earnings would be "moderately" affected as the continuing decline in commodities hits volumes in its conveyor belting business.Although the non-oil specialty polymer businesses in Advanced Engineering Product (AEP), which represent approximately two-thirds of divisional turnover, are expected to continue to perform well, volumes declined in Engineered Conveyor Solutions (ECS) in Australia in coal.Furthermore, the step down in oil-related demand for seals in AEP has been sharper and sooner than Fenner expected, raising the risk that volumes and pricing may not yet have stabilised."Considerable emphasis" is being placed across the group to cut costs, the company said, with ongoing programmes in both ECS and AEP to manage variable costs, but earnings per share for the year are expected to be 'moderately below' expectations.In addition, it has put in place a plan to deliver annualised reduction in cash overhead expenditure of £9m announced in January.Broker Investec said: "Although visibility is lacking and the company is taking out cost - with contingency plans for more - we reduce our EPS estimates by a further circa 9-10%."