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Carter Holt Harvey Announces Strong Third Quarter

Carter Holt Harvey Announces Strong Third Quarter Result

Today Carter Holt Harvey announced net earnings for the third quarter 2002 of $60m, compared to $15m in the same quarter last year.

Net earnings for the first three quarters of 2002 were $133 million, compared with breakeven for the same period last year. Operating earnings before interest and tax (EBIT) of $251 million for the nine months were 156% more than the $98 million made a year earlier.

CEO Chris Liddell said the quarter on quarter improvement the company has made over the last three reporting periods was very pleasing.

“The underlying performance of all of our businesses has improved, with Wood Products doing particularly well in this past quarter. I believe we are beginning to see the benefits of having smaller more focused businesses, which are closer to their customers and able to respond to their market conditions more quickly.

“Growth continues to come from Asia – China in particular – and Australia, where the average cash flow return on investment (CFROI) of our businesses is now at our cost of capital.

“We’ve demonstrated a disciplined approach to our growth in Australia which has been successful. The announcement today of the purchase of Starwood Australia’s MDF plant in Bell Bay Tasmania will further enhance our leadership position in wood products, with additional export opportunities to Asia,” said Mr Liddell.

The company also reported significantly improved performance on safety measures.

The average total incident rate (TIR) on a 12 months rolling basis is now just 2.70.

This represents a 20% improvement year on year.

The only significant negative in Carter Holt Harvey’s announcement was around Kinleith, which had its third quarter loss in a row and has now lost over $13 million for the year.

“Implementing a restructuring programme at Kinleith has become urgent,” said Mr Liddell.

In addition to the earnings result, Carter Holt Harvey reported that its balance sheet was strong.

“The increase in operating earnings and results from other initiatives we have undertaken to improve cash flow have resulted in the company achieving its strongest balance sheet in over a decade. “While we’re cautious about the global outlook, Carter Holt Harvey is in a position of financial strength. We are relatively well positioned and the underlying performance of our businesses is consistently improving.”

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