KEY POINTS:
Tenon today reported an unchanged bottom line interim profit and disclosed a deal to sell a external pine wood trim product made in the United States.
Tenon is the rebranded Fletcher Challenge Forests after the company sold all of its forests and structural timber sawmills to focus on high-value appearance grade lumber products and distribution relationships in the US market.
Its chief executive is based in the US and it reports in US dollars.
Tenon said today its earnings before interest tax, depreciation and amortisation rose 50 per cent to US$9 ($13.13) million. The bottom line profit was US$2m, unchanged from last year.
Even at the top end of the timber processing industry the going is tough at the moment.
"In light of the very challenging business environment experienced in the second quarter, we consider it to be a solid financial performance for the group," chief executive Mark Eglinton said.
New house building starts in the US for the six months were 22 per cent below the same period in 2005 and renovation market spend was flat.
"These factors, combined with a continued high NZ exchange rate against the US dollar, resulted in prices for moulding and better lumber (in New Zealand dollar terms) finishing the half-year at their lowest levels since we entered the market in 1995," he said.
Tenon has been restructuring and cutting costs. It was silent about a Danish furniture venture it had previously had high hopes for.
It has a large mouldings plant in Taupo which it said was being converted to lower cost geothermal energy.
Today the company announced a new alliance with BlueLinx, a distributor of building products in the US for a product trademarked by Tenon called Lifespan.
Lifespan is similar to Tenon's Armourwood product sold through the Lowe's DIY chain in the US. It is radiata pine fortified by light organic solvents to extend durability and is used as external trim on buildings.
The product is made at Taupo.
- NZPA
