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Improved Final Quarter For Carter Holt Harvey

Improved Final Quarter For Carter Holt Harvey In 2001

Carter Holt Harvey today announced consolidated net earnings for the three months to December 2001 of $25 million compared to $15 million the previous quarter. Operating earnings were $68 million compared with $16 million last quarter.

For the nine-month year to December 2001 net earnings were $6 million – compared with $218 million for the same period for the previous year. Net sales for the nine months were a record $3,154 million compared to $2,854 million last year.

Carter Holt Harvey CEO Chris Liddell described the trading conditions for the year as extremely challenging, with a number of key influences such as pulp and log prices and the Australian building market being at or near cyclical lows during the year.

“The economic conditions have been extreme. To counter this, we have concentrated on short-term performance improvement through cost control. Initiatives included lowering working capital by $100 million in the last six months of the year, a focus on overheads and a freeze on senior salary increases for the new financial year.

Despite the disappointing yearly result, the company noted some specific highlights for the year:
 record log exports to Korea and China
 a strong performance from New Zealand Packaging operations
 market share and earnings increases in Tissue
 the newly acquired Tasman pulp mill beating its cost of capital despite pulp prices falling to cyclical lows
 strong cash flows in the second half of the year.

Chris Liddell said he was pleased with how the company was responding to the challenging environment, with the new, decentralised structure allowing each business to respond more quickly and specifically to its particular challenges.

Despite the quarterly improvement he emphasised the company’s need to continue to make changes to meet the challenges of a mixed global outlook.

“We don’t expect the economic environment to substantially improve in the first half of 2002. Whilst we will still pursue our strategies of innovation and growth, the company will also stay aggressively focused on managing key controllables. We will continue to take the actions necessary to ensure every business is capable of earning its cost of capital on a sustainable basis.”

The company’s Board of Directors declared a dividend of $NZ3 cents per share, to be paid on 25 February 2002.

Carter Holt Harvey also announced that it is in discussions with the Australian Stock Exchange (ASX) regarding taking a full compliance listing. As part of these discussions, the company is not planning to move its corporate office to Australia or change its listing on the New Zealand Stock Exchange (NZSE).

ENDS

 Carter Holt Harvey has moved its balance date to 31 December resulting in a nine-month financial year in 2001.
 All figures are in New Zealand dollars.

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