By NZPA
|
Wednesday 16th October 2002 |
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The result for the quarter ended September 30 compared with the $15 million recorded by the New Zealand forest products company for the same quarter last year.
The figure was roughly in line with average analyst expectations of $58 million.
It lifted Carter Holt's nine-month net profit to $133 million, compared with break-even for the same period last year.
Unaudited operating earnings before interest and tax (Ebit) for the first three quarters was $251 million, up 156 percent from $98 million.
"It's a great story from our perspective," Mr Liddell told a briefing in Sydney.
"Our balance sheet is in the best shape it has been in over the last decade and we are achieving growth, especially in Australia."
He was speaking after Carter Holt, just over half-owned by the world largest forest products company, International Paper, announced its results in Sydney for the first time.
It also announced further expansion in Australia with the conditional purchase of Starwood Australia's four-year-old medium density fibreboard (MDF) plant in Tasmania for $A50 million.
Mr Liddell expected the rest of the year to be "reasonably solid overall".
What happened next year depended on international developments and how they affected the company's Asian markets.
"But the positive aspect is that, while we will always be a business that will be exposed to some extent to what happens globally, our underlying performance is demonstrably better," he said.
"Our ability to get value out of the market conditions we face is significantly better than it was a year ago, and better again than two years ago. We go into a mixed global environment in much better shape."
All of Carter Holt's divisions improved during the nine months to September, compared with the same period last year, especially wood products, with Ebit of $67 million, up from $9 million.
The continued strength of the housing market, particularly in Australia, and price rises in timber and panels were reasons given for the better performance.
Ebit for the forest division rose to $101 million for the nine months from $41 million, with a record 806,000 tonnes of logs exported during the September quarter.
Mr Liddell said he expected some softening in log prices, "but essentially it's a stable environment for forests going forward".
The tissue division had Ebit of $34 million for the nine months, up from $26 million, while packaging's was up to $18 million from $10 million.
The pulp and paper division also increased Ebit, to $31 million, up from $5 million, but was seen as providing the one disappointing feature of the results.
"It's a better nine months, but it's still not making, in our view, anywhere near enough money," Mr Liddell said.
"Given the size of this particular division, this continues to be the one where we have the biggest challenge in terms of getting the returns that we need."
He said this was the reason Carter Holt was restructuring the Kinleith mill, which had failed to be profitable for a third quarter in a row and had losses for the year so far of $13 million.
"The issue is Kinleith, to be honest," he said.
He added that the restructure was due to completed by the end of the year, with a reduction in net jobs of about 190.
Savings of $30 million a year had been identified against a one-off cost of about the same amount.
Mr Liddell said the purchase of Starwood Australia's MDF plant was part of Carter Holt's "disciplined approach" to acquisitions in Australia.
The plant, which has a capacity of 180,000 cubic metres and is operating at about two-thirds of that, produces fibreboard for export to Asia.
Mr Liddell said synergies existed with Carter Holt's two exisiting MDF plants and in the ability to ship product from Tasmania to the southern Australian states.
The plant was expected to be cost-of-capital positive next year and to provide 15 to 20 percent cashflow return on investment when at full production.
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