Owens lowers profit outlook

At the end of November the company reported an 81% increase in interim profit to $2.61 million and said that "barring a sustained and major economic downturn" it expected the full-year result to be significantly ahead of the previous financial year.

However the company has now advised that it is likely to record an operating profit, after taxes and before abnormal costs, at a similar level to last year's figure of $4.9 million.

"Recent trading factors have affected the second half result and our best current estimate is that we will maintain our operating profit after taxes at a similar level to last year for the full year to the end of March," says chief executive, David Ritchie

Mr Ritchie has outlined a variety of factors influencing current performance including a weak international economy, which is adversely affecting exports from Australia and New Zealand, and a slower than expected domestic economy.

The wet summer is also getting some of the blame.

"Unusual weather conditions in NZ have impacted on perishable export product levels such as cherries, strawberries and asparagus," he says.

"Excellent grass growing conditions have also seen a delay to sheep, lamb and beef kill volumes, impacting on our rural transport as well as exports."

Other factors include delays in rationalising the company's freight forwarding activities in Australia, increased competition in both countries and difficulties in securing air freight capacity for exports following September 11.

The company also has concerns about the structural changes in the shipping industry internationally which is says will present Owens Ships' Agency with a number of challenges in the new financial year.

Mr Ritchie says a number of business units are trading well but the company felt that the market should be aware of the current view on the full year profitability.

"We are acting decisively to overcome issues that have been identified and are moving forward positively into the new financial year."

He says given the trading conditions experienced, the forecast outcome for the current year can be considered satisfactory.

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Anti-spam verification:

Type the text you see in the image into the field below. You are asked to do this in order to verify that this enquiry is not being performed by an automated process.