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Nuplex Profit Up

24 February, 2006

Nuplex Profit Up On Back Of Solid Operational Performance And Asset Sale

Statement made by Fred Holland, Chairman, Nuplex Industries Limited

A more internationally focused and significantly enlarged Nuplex Industries posted a 123% increase in unaudited after tax profit attributable to shareholders of $40.1 million for the six months ending 31 December, 2005.

Directors have declared a fully imputed interim dividend of 14 cents per share, up 2 cents on last year's interim dividend.

The six month result includes a one off profit on the sale of the Environmental Group in late November 2005 of $24.4 million ( nil in the 2004 half year result ).

The rapid development of Nuplex over the past six months as it moves to a more international focus rather than the previous Pacific / Asia presence, saw in this six month period the sale of the Environmental Services Group, the simultaneous purchase of PML Holdings and the inclusion of the full period trading by the Coating Resins acquisition. This makes like comparisons with the previous six months difficult.

Directors feel the most valid operational comparison is earnings before interest, tax, depreciation and amortization ( EBITDA ), and on a Group basis this increased by 28% to $47.2 million ($36.8) reflecting the addition of the Coating Resins Group.

Our Resins operations continue to be the mainstay of the business, and it increased its contribution to EBITDA by 52% to $37.7 million, or 80% of total Group EBITDA ( 67% for the previous period ).

Group sales increased by 75% to $603 million, with $257 million of that increase being contributed by Coating Resins.

Nuplex performed well during the first half of the year and our financial result is in line with expectations. We have laid a foundation for a solid year end result.

Profits from newly acquired operations will fully offset those lost through the sale of the Environmental Services Group, and we are forecasting a year end result for earnings before interest, tax, depreciation and amortization ( EBITDA ) of close to $100 million.

The international trading environment remained difficult throughout the period. Selling prices and raw material costs fluctuating substantially and this volatility was only compounded as a consequence of petrochemical price shocks caused by hurricanes Katrina and Rita.

The United States market remained strong throughout the trading period while the European market gathered momentum towards period end. Asia remained solid, and we saw margins recovering in Australia and New Zealand, although demand was slightly down. Our China operations produced a positive EBITDA result.

This result demonstrates that Nuplex is more than capable of operating successfully as a specialist world supplier of resins and resin based products.

The second half result is expected to exceed the first half with any weakening in petrochemical pricing being beneficial to our margins, particularly in Europe and the United States.

The long anticipated decline in the exchange rate of the New Zealand dollar against the US dollar will have a positive effect on our results in NZ dollar terms.

At period end net debt as a percentage of total tangible assets had improved from 49% to 39%, and net debt as a percentage of total funds employed had declined from 56% to 51%.

The 14 cps dividend will be paid on Friday, 7 April 2006 to shareholders on the register at the close of trading on Friday, 24 March 2006. Overseas shareholders will receive a supplementary dividend of 2.5 cents per share.


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