Profits up at Nuplex Industries

Nuplex Industries chief exeuctive Emery Severin. Photo / Natalie Slade

Nuplex Industries posted a 3.6 per cent increase in full-year profit, beating its guidance, as sales rose and the specialty chemicals maker recognised fewer impairments and one-time costs.

Profit rose to $66.5 million, or 34.2 cents a share, in the 12 months ended June 30, up from $64.2 million, or 33.7 cents, a year earlier, the company said in a statement today. Sales rose 7.9 per cent to $1.58 billion.

Profit bettered the guidance the company gave in May of annual profit of between $62 million and $65 million.

It also exceeded the $1.52 billion of sales and $65.2 million of profit forecast by Forsyth Barr analyst John Cairns. Nuplex shares rose 7.6 per cent to $2.55 on the NZX today, having shed about a third of their value this year.

"We were able to deliver earnings similar to the record result of 2010 despite rapidly rising raw material costs, weak Australasian economic conditions and a higher New Zealand dollar," said chief executive Emery Severin.

The group's diversity of earnings helped the company "deliver solid returns in a challenging operating environment."

Earnings before interest, tax, depreciation and amortisation fell 6.1% to $130.9 million, after reaching a record $139.4 million in 2010, which partly reflected a restructuring charge, the company said.

Sales from its largest resins unit rose 8.8 per cent to $1.17 billion, while EBITDA fell 10 per cent to $107 million.

Increased sales of its global coatings resins business were offset by continued high prices for raw materials and the impact of a high kiwi dollar, it said.

It also recorded lower volumes from its Australasian non-coatings businesses, reflecting weaker consumer demand, lower construction and manufacturing activity and higher kiwi and Australian dollars, it said.

In its specialties business, sales rose 4.1 per cent to $302 million and EBITDA climbed 20 per cent to $23.4 million.

Nuplex will pay a final dividend of 11 cents a share, bring annual payments to 21 cents, unchanged from 2010. The company suspended its dividend reinvestment plan.
It gave no guidance for the 2012 year.

Severin said the company's product diversity gave it "a sound position from which to operate."

"We will continue to work towards improving our operational; performance and delivering future growth," he said.

The company's interest expense dropped to $16.3 million from $20.4 million after it trimmed the size of its bank facility.

Under the heading of other operating expenses, it had a $7.3 million impairment on plant and equipment in 2010 that wasn't repeated in the latest year, and smaller legal costs and costs for site remediation.