Carter Holt Harvey, which sold its pulp, paper and packaging businesses last month, more than tripled gross margins at its Australian building supplies in 2013 and reversed write-downs it took on its timber business a year earlier, narrowing the company's annual loss.
Building Supplies Group Holdings, an Australian unit of the combined Carter Holt group, made a loss of A$14.6 million in the 12 months ended Dec. 31, compared to a loss of A$326.6 million, a year earlier, according to financial statements lodged with the Australian Securities & Investments Commission. The company fattened gross margin to 6.29 percent of revenue from 1.98 percent a year earlier, even as sales slipped 4.9 percent to A$869.6 million.
The result included a A$62 million reversal of impairment losses on Building Supplies' wood products timber business, amounting to almost half the charge it had taken in 2012. The Carter Holt unit made an operating profit of A$56.8 million, compared to a loss of A$304.8 million in 2012.
"These partial impairment reversals reflect a combination of improved trading conditions, the implementation and realisation of restructuring and operational efficiencies and improved general market expectations regarding housing construction," director Helen Golding said in her report. "Collectively, these factors resulted in a revised estimated of the probable future value to be generated by the Wood Products Australia - Timber business."
Carter Holt shut two South Australian timber mills and laid off about 100 people in 2012, blaming the state government for refusing to renegotiate the price the firm had to pay for logs. It rejected an A$27 million assistance package from the South Australian government which would have forced the company to keep the mills open and maintain a minimum level of employment and production.
