Nuplex profits fall 65pc to $16.7m

Nuplex chief executive John Hirst. Photo / Dean Purcell.

Nuplex Industries reported a 65.4 per cent fall in full year net profit to $16.7 million as tough economic conditions battered the company.

Revenue for the 12 months to the end of June fell 2.5 per cent to $1.49 billion.

Managing director John Hirst said the 2008/09 financial year was without doubt the most testing in the long history of Nuplex, which makes and distributes resins, and other specialty products.

"After a strong start we suffered a number of major setbacks," he said today.

"First, rises in raw material costs in the early part of the year inhibited margins; then the collapse in European business in the second quarter culminated in a 30 per cent reduction in demand over the prior year.

"The recession continued in the USA and New Zealand and business conditions there, which were already poor, deteriorated. In Australia, products exposed to discretionary spending were hit hard and, while Asia had a number of high spots, the lack of global demand for exports such as furniture took its toll."

During the financial year Nuplex also had to raise nearly $160m in new capital to meet debt commitments, following a fall in first half sales.

Hirst said trading conditions now were best described as stable, with general optimism that the worst downstream impacts of the global financial crisis had passed.

A final dividend of 5c per share will be paid, along with a special dividend of 3.5c per share, which Nuplex said reflected directors' confidence in the company's future performance and strength of the balance sheet.

Nuplex shares were up 24c, or 11.1 per cent, to $2.40 in late morning trade.

- NZPA