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Transpacific Industries returns to annual profit

Transpacific Industries returns to profit, helped by sale of NZ unit

By Suze Metherell

Aug. 19 (BusinessDesk) - Transpacific Industries Group, the Queensland-based waste-management company, returned to profit and will resume paying dividends after a six-year pause after using proceeds from asset sales to repay debt.

Profit from continuing and discontinued operations was A$28.9 million in the year ended June 30, 2014, turning around a loss of A$200.4 million a year earlier, the company said in a statement. Revenue fell 4.9 percent to A$1.42 billion as sales in its Cleanaway business and industrial segment declined. The group declared a dividend of 1.5 Australian cents per share, with a record date of Aug. 29 to be paid on Oct. 8. The company has not paid dividends since 2008, it said.

The waste manager hired new chief executive Bob Boucher last October as part of its plan to strengthen its balance sheet after a debt-fuelled expansion before the global financial crisis, culminating in 2008 with the A$1.25 billion acquisition of rival Cleanaway to create Australasia’s biggest waste disposal firm.

Transpacific Industries sold its New Zealand business to Beijing Capital for $950 million, recognising a gain of A$41.1 million, having acquired the operation for $870 million in 2006. Separately, it sold its Commercial Vehicles for a gain of A$131 million.

After using the proceeds from asset sales to repay debt, Transpacific Industries had a net cash position of A$137 million at June 30, from a net debt position of A$978 million a year earlier, it said.

"The transformation of our balance sheet has been completed," said Boucher, after the company sold or closed 39 non-core, under performing branches as well as the New Zealand and vehicle businesses. "The next phase is improving our operational performance and laying a solid platform for growing our business and improving cash flows."

Transpacific Industries took a A$189 million after-tax charge related to landfill rectification and remediation provisions, which was offset by the business sale income.

The dual-listed shares rarely trade on the NZX and were unchanged at $1.20, having declined 11 percent this year. On the ASX they last declined 7.6 percent to A$1.01, and have fallen 6.6 percent since the start of the year.

(BusinessDesk)

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