Acquisitions help Nuplex to double half-year earnings

A stronger international presence has helped resins company Nuplex to double its half-year profit to $40.1 million.

This is up $22.2 million on the same period a year earlier, bolstered by the $24.4 million pre-tax gain from the November sale of its environmental services group.

Chairman Fred Holland said the company expected the second half to exceed the first and was sticking to forecasts for a full-year trading profit of $100 million.

"We anticipate that conditions for the second half will generally be similar to the first with any weakening in petrochemical pricing being beneficial to our margins, particularly in Europe and the United States."

He said the expected weakening of the currency would have a positive effect on the result in New Zealand dollar terms.

Nuplex is Australasia's largest producer of resins - synthetic compounds used in paints, printing inks, adhesives and fibreglass. Last year, it paid $44 million for PML Holdings - a group of Australian suppliers of raw materials for chemicals - and bought Netherlands-based Coatings Resins from chemicals giant Akzo Nobel for $136 million.

Coatings Resins made the company $257 million in revenue for the half and PML contributed $6 million.

Nuplex said that given their contribution, the best financial comparison with the previous period was found in its trading profit, which increased $10.4 million to $47.2 million.

Holland said the international trading environment had remained difficult throughout the period.

Fluctuating sale prices and raw material costs were compounded by petrochemical price shocks caused by hurricanes Katrina and Rita.

The 14c dividend for the half is the last for which 100 per cent imputation credits are available for Kiwi shareholders.

Nuplex shares closed down 3c at $4.95 yesterday.