Shares in Carter Holt Harvey (CHH) fell 14c, or 6.7 per cent, to an 18 month low of $1.96 today after the wood products firm issued a profit warning.
The company said its operating profit for the March 2005 quarter would fall between $45 million and $50 million and it
could be up to 42 per cent lower than the $77m recorded in the same period a year earlier. The result is due in April.
It was also the first time CHH had reported using the new international financial reporting standards (IFRS), it said in a statement to NZX today.
The key factors affecting the operating profit were having, under IFRS, to include the full impact of maintenance shuts, and no longer including goodwill amortisation.
There was also a softness for demand for wood products, particularly in Australia, the firm said.
"Demand in the residential building sector is yet to pick up after the traditionally slow Christmas holiday period," CHH said.
"The company is taking a number of steps to improve productivity in its wood products business in response to the market conditions.
"Overall the company is expecting its underlying financial performance for 2005 to be in line with expectations, assuming forex and pulp prices are at forecast levels."
Meanwhile, CHH said it would increase the value of its forest asset by $90m to $100m, making it worth about $1.565 billion.
Under IRFS, the forest asset was revalued quarterly, taking into account changes in average price, harvest and quarterly growth.
"Price improvements during the March quarter are the main reason for the forecast increase in value of the forest asset."
Looking ahead, CHH said it expected an improvement in market conditions in the second half of the financial year.
- NZPA
