Carter Holt posts first half net profit of $139 million

Forest products company Carter Holt Harvey today posted a net profit of $139 million for the first half ending June 30.

The result is down significantly on the same period last year, however, the recent adoption of international accounting standards, one-time gains from asset sales and forest revaluations have made direct comparisons meaningless.

Last year's first half profit include the proceeds from the sale of CHH's tissue business.

The operating profit from continuing operations before unusual items, finance costs and tax expense for the June 2005 half year was down by $25 million on the same period a year ago.

Trading revenue in the first half was $1.59 billion, down 1.6 per cent.

Net earnings from continuing operations were $140 million for the half year ended June 30, compared with $79 million for the same period last year (which was impacted by a $37 million restructuring charge).

Earnings from the wood group were lower, due to a drop in demand in the housing market in Australia and increased operating costs for labour, energy and fibre.

Pulp and paper were impacted by the strong New Zealand dollar and maintenance shut downs at both pulp mills.

Earnings from the Forest business improved due to additional land sales, offset by the reduced harvest cut.

Earnings per share were 10.6c, compared with 31c a year ago. On a continuing operations basis, that was up from 4.6cps a year ago.

The company will pay an interim dividend of 5cps on August 23.

Shares in CHH last traded yesterday at $2.47. They have climbed around 40 per cent from $1.73 in the past six weeks since majority shareholder International Paper said it is assessing its 50.1 per cent stake.

Goldman Sachs JBWere analysts on Tuesday increased their break-up valuation of the company by $471 million - or 36c per share.

It now estimates that a CHH in pieces is worth $2.81 per share - versus the firm's estimate last month of $2.45.


For the three months to June 30 the company posted a net profit of $50 million, down on the first quarter's $90 million - but bettering analysts' expectations of a $35 million first quarter profit.


- NZPA