Nuplex Increases Profit, Dividend In Tough Envrnmt
August 19, 2005
Nuplex Increases Profit And Dividend In Tough Environment
Statement made by Fred Holland, Chairman, Nuplex Industries Limited
Geographic and product diversity assisted Nuplex Industries to weather adverse international trading conditions and post an after tax operating surplus of $29.2 million, an increase of 2.8%, for the financial year ending 30 June 2005.
It was the strength that comes from operating across four continents - Australasia, the Americas, Asia and Europe - that assisted us to make modest profit progress during a difficult year.
In spite of crucial international raw material shortages, savage petrochemical associated price increases, a softening demand in Australia, Asia and Europe, and a stubbornly high New Zealand exchange rate, we were able to deliver a reasonable profit in line with guidance given to the market.
While earnings per share at 40.8 cents is down on last year's 45.9 cents, as a consequence of issuing 14.6 million new shares, directors are confident in the forward momentum being achieved and have approved a 1.5 cent increase in final dividend to 14.5 cents, bringing the full year's fully imputed dividend to 26.5 cents ( up 8% or 2 cents ).
The underlying strength of operations, and the benefits of the significant expansion undertaken during the year, can be seen in the 42% increase in revenue to $929 million.
Earnings before interest, tax, depreciation and goodwill amortization ( EBITDA ) was up 10% to $81.5 million, a pleasing increase given the many challenges we faced and overcame during the year.
Nuplex is now a significantly different company following the acquisition of the Coating Resins business from Akzo Nobel for $208 million during the year.
The acquisition was an important stepping stone that has repositioned us from a regional into a global player in the resin industry utilising leading edge technology.
Our new Coating Resins business generated sales in the six month period of $255 million, and delivered an EBITDA return of $12.6 million.
In our most significant market, Australia, a softening of demand saw sales decline in New Zealand dollar terms by 1% to $478 million, and EBITDA by 10% to $44.2 million.
New Zealand traded well, increasing sales by 7% to $160 million, EBITDA by 5% to $22.3 million.
The company's capital expenditure during the year was $19.6 million, up 8%, and the debt to total tangible assets percentage at balance date was down from 41.5% to 41.2%.
Directors are offering shareholders the opportunity to reinvest their dividend back into the company through the dividend reinvestment plan at a discount of 10 cents on a weighted average sale price formulae.
In the current financial year focus will go on maximising the potential that exists within our current businesses. This will include restructuring business portfolios and seeking sensible "bolt on" acquisitions designed to achieve growth.
In the mid term there appears little change in the outlook for petrochemical prices, raw material demand and the New Zealand exchange rate.
While economic demand in New Zealand, Australia, Europe and Asia is expected to be flat with some recovery in Asia, our financial result will benefit from a full-year's contribution from the acquired coated resin's business.