Nuplex reports lower interim profit

Thursday 24th February 2011

Nuplex Industries has reported an 10% fall in interim profit on a 6.5% rise on revenue and has maintained its dividend.

Net profit after tax fell 10% to $31.1 million in the six months to December 31, compared to a year earlier. While earnings before interest, tax, depreciation and amortisation was $65.1 million, down 5.3% on last year. The company said three percentage points of this decline was due to the impact of the higher New Zealand dollar.

The chemical and resins company said the settlement with the Securities Commission revealed yesterday had a $1.8 million impact on profit after tax.

The board declared an interim dividend of 10 cents a share, which is the same level as last year. The dividend was equivalent to 59% of operating profit after tax.

The company said that full-year earnings before interest, tax, depreciation and amortisation will be towards the lower end of guidance between $135 million and $145 million.

It cited uncertainty about the Australian and New Zealand economies, which represents around 50% of its business as a difficulty.

Sales of $761.5 million, were up 6.5% and reflected both higher volumes and price increases.

In New Zealand, volumes were impacted by the soft housing market and the unusually wet winter.

Raw materials prices increased by 9% in the half year, which the company described as significant, but it said it was able to recover 90% of the increases and would recover more in the second half.

"Despite a backdrop of the strengthening New Zealand dollar and rising raw material costs, today's result highlights the benefit of our geographic diversification," chief executive Emery Severin said.

NZPA

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