Transpacific group expect earnings fall

Transpacific Industries Group, which provides waste and environmental services in Australia and New Zealand, says it expects a drop of up to 23 per cent in first-half earnings due to weaker market conditions.

Transpacific said yesterday it anticipates operating earnings before interest, tax, depreciation and amortisation for the six months to December 31 to be between A$197 million and A$200 million ($249-$252 million).

Operating earnings in the previous corresponding period was A$255.7 million. The anticipated first-half result is higher than in the six months to June 30, however, when operating earnings were A$191.9 million.

Transpacific expects first-half operating Ebit (earnings before interest and tax) to be between A$115 million and A$118 million.

Operating conditions were mixed in the six months to December, but stabilisation is beginning to occur, the company said.

"While the company's municipal business has performed well, and commodity prices have improved, market conditions were subdued in some areas, particularly those relating to commercial vehicles, manufacturing, construction and demolition and liquid waste." The company said it was seeing signs of stabilisation in the operating environment.

Transpacific's audited first-half earnings will be released on February 24.

It has forecast a A$10 million impact on net profit from a one-off mark to market expense relating to its recapitalisation process undertaken in August.

Interest rate hedges are expected to deliver a positive first-half net profit impact of about A$15 million, Transpacific said yesterday.

The results will also include an assessment of the carrying value of the company's assets.

- AAP