Settlement knocks $1.8m off bottom line

Emery Severin. Photo / Natalie Slade

Nuplex Industries has reported a 10 per cent fall in interim profit on a 6.5 per cent rise on revenue and has maintained its dividend.

Net profit after tax fell 10 per cent to $31.1 million in the six months to December 31, compared to a year earlier.

Earnings before interest, tax, depreciation and amortisation was $65.1 million, down 5.3 per cent on last year. The company said three percentage points of this decline was because of the impact of the higher New Zealand dollar.

The chemical and resins company said the settlement with the Securities Commission revealed on Wednesday had a $1.8 million impact on profit after tax.

The board declared an interim dividend of 10c a share - the same level as last year.

The dividend was equivalent to 59 per cent of operating profit after tax.

The company said full-year earnings before interest, tax, depreciation and amortisation will be towards the lower end of guidance between $135 million and $145 million.

It cited uncertainty over Australian and New Zealand economies, which represents around 50 per cent of its business, as a difficulty.

Sales of $761.5 million were up 6.5 per cent and reflected both higher volumes and price increases.

In New Zealand, volumes were impacted by the soft housing market and an unusually wet winter.

Raw materials prices increased by 9 per cent in the half-year, which the company described as significant, but it said it was able to recover 90 per cent of the increases and would recover more in the second half.

"Despite a backdrop of the strengthening New Zealand dollar and rising raw material costs, today's result highlights the benefit of our geographic diversification," chief executive Emery Severin said.

"We had strong volume growth in Europe and the US. Australian volume was tempered by the wettest spring on record and the cautious Australian consumer, which particularly impacted the composites business.

"In New Zealand, volumes were impacted by the soft housing market and an unusually wet winter. Overall, Asian volumes were up slightly with the pace of volume growth increasing in the second quarter."

- NZPA

NUPLEX

Revenue: $761.5 million, up 6.5 per cent

Profit: $31.1 million, down 10 per cent