Carter Holt Harvey shares plunged to an 18-month low yesterday as investors reacted to the big March quarter profit downgrade released just before the Easter break.
The downgrade - which forecast operating profit could be as much as 42 per cent lower than in the same period last year -
was released to the Australian and New Zealand stock exchanges on Thursday afternoon but, because the NZX had closed early for Easter, only the ASX posted the news on its website.
The downgrade was finally posted on the NZX site yesterday morning.
CHH shares fell 14c - nearly 7 per cent - in morning trading to $1.96 but bounced back later in the day to close down 8c at $2.02
CHH spokesman David Jamieson said the company did everything it was supposed to with regard to disclosure obligations.
"It certainly wasn't an attempt to pull the wool over anyone's eyes," he said. "Our company secretary had discussed this with the NZX beforehand."
Jamieson said he understood the announcement went to the ASX after trading had closed.
The NZX said it was comfortable CHH had complied with all listing rules with regards to the announcement and would be taking no action.
The company said its operating profit for the March 2005 quarter would fall to between $45 million and $50 million. It could be up to 42 per cent lower than the $77 million recorded in the same period a year earlier. The result is due next month.
The extent of the downgrade was inflated because this is the first time CHH will use new international financial reporting standards (IFRS).
It said IFRS was a key factor affecting the operating profit. It meant having to include the full impact of maintenance shut-downs and no longer including goodwill amortisation.
Demand for wood products had also been weak, particularly in Australia.
"Overall, the company is expecting its underlying financial performance for 2005 to be in line with expectations, assuming forex and pulp prices are at forecast levels," CHH said.
Meanwhile, CHH said it would increase the value of its forest assets by up to $100 million, making it worth about $1.565 billion.
Under IRFS, the forest assets were revalued quarterly, taking into account changes in average price, harvest and quarterly growth.
Looking ahead, CHH said it expected an improvement in market conditions in the second half of the financial year.
Jamieson said the company had already flagged that the first quarter would be a tough one and it should not have been a huge surprise to most investors.
"We could see the Australian market slowing down last year," he said.
Falling profit
* CHH's result is due next month.
* Operating profit is forecast to fall to between $45 million and $50 million for the March quarter.
* It could be 42pc lower than the $77 million recorded last year.
* CHH says the new international financial reporting standards have been a key element in the downgrade.
- additional reporting NZPA
Carter Holt Harvey shares plunged to an 18-month low yesterday as investors reacted to the big March quarter profit downgrade released just before the Easter break.
The downgrade - which forecast operating profit could be as much as 42 per cent lower than in the same period last year -
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