Carter Holt Harvey cautiously optimistic

By Felicity Anderson, Nzoom.com Business News Editor

Wednesday 17th October 2001

Carter Holt Harvey got its head back above water in the three months to the end of September, but its optimism for improvement remains tempered with caution.

The timber, pulp and paper, packaging, tissue and distribution business reported net earnings of $15 million for the quarter.

That compares with a loss of $34 million for the June quarter.

But over the past six months it reports a net loss of $19 million.

The tough conditions CHH has faced inb the past year is magnified when that loss is compared with a $176 million profit for the same period in 2000.

Chris Liddell, CHH's Chief Executive, says prices for logs, pulp and linerboard have all reached cyclical lows in the past six months.

"For the pulp and paper business alone, this price slump is estimated to have cost $96 million in the past six months," he says.

Adding to that CHH's power bill went up by $14 million in the six months.

But Liddell says September was CHH's best month this year and it anticipates further improvement.

"This is based on the robust construction markets in Australia and New Zealand and seasonal improvements in our packaging, tissue and distribution businesses," he says.

But in light of the global slowdown Liddell says CHH will be concentrating on increasing margins and decreasing costs, working capital and other operational efficiencies.

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