Tax liability drags Carter Holt third quarter result into the red

1.00pm

Wood processor and forester Carter Holt Harvey today announced an $87 million net loss for the three months to September 30, down from a $70 million profit for the same period last year.

The result was affected by a tax expense of $128 million associated with its forest sale plans.


Carter Holt, which sold its tissue business to Svenska Cellulosa AB for $1 billion in March, said its net loss for the September quarter was achieved on net earnings before interest and tax (ebit) of $71 million, down from $89 million for the same period a year ago.

Analysts had forecast a net profit of about $44 million, and ebitda of $73.5 million.

Carter Holt said it planned to retain 220,000ha and investigate sale options for the balance (107,000ha) which are "non-strategic" forests in Auckland, Coromandel, Hawke's Bay, Bay of Plenty and Canterbury following a strategic review of its forest assets.

Because of this the company had accrued a non-cash deferred tax expense associated with these forests of $128 million.

The company said it had decided to retain its strategic Kinleith, Nelson, Woodhill and Northland forest estates totalling 220,000ha.

The company, 51 per cent owned by International Paper, said its sales for the quarter at $852 million were similar to the same period last year when adjusted for the divested tissue business.

Ebit for the quarter, although down on last year was up 22 per cent on the June quarter, the company said in a statement to the NZX.

"This was due to underlying improvements in business performance and the inclusion of earnings from Plantation Timber Products (PTP), the Chinese speciality panels business Carter Holt Harvey acquired in July."

Net profit for the nine month period to September 30 was $409 million compared with $162 million last year. However the result included the gain from the second quarter tissue business sale.

Comparable ebit for the nine months was "slighly less" than the same period last year, primarily due to charges of $16 million associated with the company's Share Growth Plan and Pension Fund.

Carter Holt chief executive Peter Springford, said the company's forest sale plans and the purchase of China based premium panels business Plantation Timber Products gave a clear indication of the company's strategy.

"We will continue to invest in higher returning assets that deliver growth in our core areas - wood products, pulp, paper and packaging, supported by our forest assets," Mr Springford said.

Elsewhere, the company said it was considering construction of a new "world-scale" sawmill.

Carter Holt shares fell 13c to $2.20 following the announcement.


- NZPA