Nuplex forecasts record 2011 profit, warns of currency risk

Nuplex CEO Emery Severin. Photo / Natalie Slade

Nuplex Industries said profit in 2011 will rise as much as 17 per cent to a record provided the Australian and New Zealand dollars don't appreciate much further and margins hold.

Net profit will be $68 million to $75 million in the 12 months ending June 30, 2011, managing director Emery Severin told shareholders at their annual meeting today.

That would top 2010's record $64.2 million profit, which was a rebound from the previous year's slump when the global financial crisis sapped returns.

Severin said trading in the first quarter of the year has been similar to the second half of 2010, when it fattened margins, especially on sales of resins in Europe. Europe has "held up well" though there are some signs of softening in the auto sector.

"We are wary of the historic high Australian and New Zealand exchange rates that may have an impact on the business," he said.

Volumes have softened in southeast Asia and China though there are signs demand will pick up, especially in China's auto industry.

Demand has been steady in the US and Australia while remaining weak in New Zealand.

Shares of Nuplex were unchanged at $3.46 and have climbed 18 per cent this year, while the NZX 50 Index is up just 2 per cent.

"There are still mixed signals coming from the global economy and the coating resins market," Severin said.