Mixed trading picture affects CHH investors

By PAM GRAHAM

Carter Holt Harvey chief executive Peter Springford will announce a half-year profit on Thursday with a bottom line bulging from the gain of about $464 million on the sale of the company's tissue business.

Investors' focus will be on underlying second-quarter earnings and anything the company says about the possible sale of its trees.

Carter Holt is expected to report second-quarter operating earnings of $58 million, down from last year's $68 million, which included a full three months of earnings from the tissue business.

The bottom line, excluding the gain on the sale of the tissue business, will be more than $30 million - compared with $38 million in the first quarter and $41 million in the same quarter last year. The trading picture is mixed with poor log prices countering improvements in pulp prices.

The closure of the Whakatane pulp mill for a month for an upgrade will reduce pulp and paper earnings.

The wood products unit continued to supply a buoyant building industry, but a crystal ball is required to know how much longer that will last.

The company will have about $100 million of foreign exchange gains this year and about $40 million worth were booked in the first quarter.

It has also signalled a $9 million charge for its equity-based incentive plan this quarter.