Nuplex reiterates full-year earnings forecast

Tuesday 19th May 2009

Nuplex Industries, the worst performing company on the NZX 50 Index this year, reiterated its annual earnings forecast and said it sees signs of recovery in some markets.

Annual earnings before interest, tax, depreciation and amortisation is expected to fall 29% to $87 million from $122 million in 2008. Second-half EBITDA will be “at least in line” with the first half of 2009, managing director John Hirst said in a statement.

“We are seeing early signs of recovery in some markets, with a general sense of stability in the remainder,” Hirst said. “The company continues to be profitable and is well placed to benefit significantly when demand returns to more normal levels."

Shares of Nuplex rose 2.6% to 39 cents and have tumbled 66% this year. The specialty chemicals manufacturer was forced to raise funds selling shares for as little as 23 cents apiece to strengthen its balance sheet as demand waned and a weak kiwi dollar swelled the value of its overseas debt.

It concluded its capital raising with a top-up facility where First NZ Capital, the arranger of the placement, used a call option to place the equivalent of 15% of Nuplex’s stock with sub-underwriters. The price was lifted to 27 cents a share from 23 cents.

The company remains relatively exposed to fluctuations in the currency with more than 50% of the company’s revenue derived from outside Australasia. The New Zealand dollar has been resilient this year, climbing 2.4% to 59.40 US cents after falling as low as 49.23 cents in March.

Businesswire.co.nz

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