Nuplex cuts FY guidance again as Australian manufacturing splutters; stock drops

Nuplex Industries cut the range for its full-year earnings guidance by about $11 million, saying Australia's manufacturing slump has dented demand for its resins, specialty chemicals and plastic additive products. The shares dropped about 9 percent.

Earnings before interest, tax, depreciation and amortisation are expected to be in the range of $124 million to $129 million in the year ending June 30. That compares with the $135 million to $140 million range it gave with its half-year results, which was itself a downgrade.

Manufacturing is on its knees in Australia, based on the latest Performance of Manufacturing Index for April, which sank deeper into contraction to 36.7 on a scale where 50 divides growth from shrinkage, the lowest result since May 2009.

"In Australia, manufacturing markets have been much weaker than expected in 2013," Nuplex said in a statement. "These conditions have particularly affected volumes in the Resins segment's businesses and tempered sales growth in the Specialties segment's agency and distribution business."

Its Nuplex Masterbatch plastic additives business "has also seen a softening in volumes and its EBITDA for the 2013 financial year is now expected to be around 15 percent below previous guidance of A$5 million," the company said.

Nuplex expects to pay a dividend in line with the final payment of 2012 of about 11 cents a share. The stock declined 29 cents to $2.95. It had gained about 19 percent in the past 12 months.

The company also said it faced challenging conditions in Europe while the high New Zealand dollar would probably erase $4 million to $5 million from full-year earnings.

"In Europe, volumes in the second half of the current financial year have been lower than anticipated due to the lengthy European winter and a general softening in demand," Nuplex said. "Viverso's EBITDA is still expected to be approximately 12 million euros."

Asian and American markets were performing well and to expectations, it said. The earnings will also reflect $6.8 million of costs associated with the restructure of Australian and New Zealand operations.

The company will report its results on August 15.

BusinessDesk.co.nz

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