KEY POINTS:
Shares in resins company Nuplex leapt today after it reported its half year net profit rose 185 per cent to $24 million on higher volumes and better margins.
It said profit from ordinary activities was up 60 per cent and earnings before interest and tax rose 35 per
cent to $50.7m.
It lifted its imputed dividend to 20 cents a share, compared with 15.5 cents a share a year ago.
Nuplex shares, which have traded between $5.25 and $7.81 in the last year, jumped 7 per cent, or 41 cents, to $6.20 on the announcement.
The company is New Zealand and Australia's largest maker and distributor of resins and polymers for the paint, paper and textile industries. It has operations in China, Vietnam and Holland.
It said it expects its raw profit to be at the lower end of expectations at around $120m.
Revenue from ordinary activities rose 3.5 per cent to $748,3m.
Managing director John Hirst said Nuplex experienced growth in all regions except the United States, with increased volumes and margins and an earnings turnaround in China, Brazil and the United Kingdom, where combined losses were reduced by $4.3m.
He said all operations were profitable now and although raw material costs increased once again they were covered by price increases.
"We have a sound platform on which to build in all our markets and are excited by the growth opportunities.'
Resins said rose 4.2 per cent to $558.1m and raw profit 22.3 per cent to $49.4m.
The Huntsman composites business, acquired in January last year, performed strongly.
Revenue for the specialties division rose 1.4 per cent to $184.6m while raw profit rose 29 per cent to $11.2m.
The planned sales of the Avondale (Auckland) and Seven Hills (Sydney) sites will be completed during 2008.
With strong cash flows and an increased focus on inventory management, the company's debt will be materially reduced by year end, Mr Hirst said.
He said the second half had started well, with demand in line with the first half.
Raw material costs are expected to rise, but the increases will be recovered in prices.
"All businesses are trading profitably. Should this continue, it is anticipated that the current guidance of approximately $120m ebitda for 2008 will be at the lower end of expectations."
- NZPA
