Nuplex profit drops 23pc to $24m

File photo / Kenny Rodger

Nuplex Industries posted a 23 per cent decline in first-half profit, largely reflecting weaker resin sales in Australia and New Zealand and a rising Kiwi dollar. The speciality chemicals maker kept its full-year guidance unchanged.

Profit fell to $24.1 million, or 12.3c a share, in the six months ended December 31, from $31.1 million, or 16.1c, a year earlier, the company said yesterday. Sales fell to $746 million from $761.5 million.

Nuplex first flagged the earnings decline in December, citing weaker global demand, although that did not deter the company from a buying spree in 2011 including the purchase of Viverso in Europe for €75 million and Acquos' Masterbatch business in Australia for A$23.5 million.

Nuplex shares fell 1.1 per cent to $2.62 after the results were released but closed at $2.66. The shares have climbed 15 per cent this year. It is rated "outperform" based on the consensus of six recommendations compiled by Reuters.

"The stock is going to remain in its trading range - reaffirming the full-year guidance gives confidence for investors," said Grant Williamson, a director at Hamilton Hindin Greene. "The strength of the Kiwi dollar doesn't help them."

The company will pay a first-half dividend of 10c a share, unchanged from a year earlier. The payment will be made on April 2 for shareholders on the register at March 19. The full-year dividend is also likely to be unchanged.

Full-year earnings before interest, tax, depreciation and amortisation from operations, excluding Viverso and Masterbatch, were forecast to fall 5 per cent to 10 per cent, Nuplex said.

In Nuplex's resins division, its largest business, sales fell 2.8 per cent to $595.5 million and ebitda declined 10.5 per cent to $46.9 million.

The biggest decline was for the Australasian region, where sales dropped 9.7 per cent to $215.8 million and earnings declined 32 per cent to $11.3 million.