Nuplex profit leaps nearly 900 per cent

By PAUL PANCKHURST and NZPA

Resin and chemical manufacturing company Nuplex Industries reported a net after-tax profit of $12.6 million for the year to June 30, up nearly 900 per cent from last year's $1.3 million.

The Auckland-based company cited improved trading conditions in Australia as a key factor, plus lower costs for petrochemical raw materials.

Sales revenue was up 4 per cent at $420 million, mostly as a result of increased demand in Australia, the company's biggest market.

Demand was flat in the second-biggest market, New Zealand.

Earnings before interest, tax, depreciation and amortisation (ebitda) were a record $52.9 million, up 11.5 per cent.

The company will pay a fully imputed dividend of 9c a share on October 11.

The result included a one-off $6.8 million write-down of assets and goodwill associated with a poorly performing medical waste business in Australia.

The company predicted similar trading conditions for the next year, with firm demand in Australia and continued weakness in the New Zealand industrial sector.

Nuplex expects good growth in its smallest market, Vietnam, where an expansion to triple capacity at a manufacturing plant is on target for commissioning in 2003.

The company says the newly acquired company Asia Pacific Specialty Chemicals is expected to contribute more than $11.6 million in earnings in the first year.

Nuplex hopes the purchase will make it Australasia's largest manufacturer of resins for coatings, adhesives, composites and paper.

For APS, it is likely to mean redundancies for some of its 361 staff and the possible sale of non-core businesses as Nuplex strips out duplication between the two companies.

Nuplex managing director John Hirst said the food nutrition and resins markets gave plenty of room for growth.

Hirst signalled further acquisitions were likely.

"We still believe that there's a lot of merit in Nuplex for getting bigger. I guess we would have a view that we would like to lift our profile to be well inside the NZSE Top 40 and the ASX-200 and to do that well we're going to have to make some further moves."