Building boost, pulp prices help CHH sales

By Libby Middlebrook

A buoyant construction industry and rising pulp prices contributed to a 16 per cent increase in Carter Holt Harvey sales for the three months ended September 30, say industry analysts.

Sales rose to $790 million during the quarter. In the same period last year the company recorded sales of $680 million.

But Carter Holt's manager of investor relations, Jim Whineray, said he was reluctant to give reasons for sales growth until the company released its first-half results on November 4.

"Broadly speaking, the company has seen improvements across all of its businesses."

A Warburg Dillon Read analyst, Stuart Graham, said a rise in pulp prices this year from about $US460 ($902) a tonne to $US580 had contributed to the increase in earnings, along with more demand for timber from the New Zealand housing industry.

"That's the main reason why they have been able to record a high number."

Building consents rose to 24,371 for the year to August, about 6 per cent up on the same period last year.

A Merrill Lynch forest products analyst, Simon Gresham, said the recovery of the Asian economy had also boosted Carter Holt's sales.

"They've had price increases in all of their commodity groups.

"Asia is recovering, the US market is very strong and Australia's reasonably good and that's flowed back and had an impact on export prices."

Fletcher Challenge spokesman Barry Akers said that company had also benefited from a rise in demand from the construction industry.

In the wake of its sales report, Carter Holt's share price moved up 7c to close at 240c yesterday.