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Carter Holt Harvey reviews end of year forecast

Date: 12 September 2005

Carter Holt Harvey reviews end of year forecast

Carter Holt Harvey Limited

The directors of Carter Holt Harvey Limited advise that following a review of the Company’s 2005 forecast, the price recovery in some of the Company’s key products that had been expected in the third quarter has not materialised. Prices for Bleached Kraft Pulp are US$480 per tonne, Kraft Linerboard prices are currently at US$425 per tonne, and average Australian timber realisations are approximately AU$350 per cubic metre. These prices are at low points for the year.

The impact of a continuation of prices and foreign exchange rates at or around current levels for the rest of the year implies that earnings may be down by approximately NZ$25-30 million versus the Company’s previous forecast of NZ$283 million. In addition, following the closing of the announced forest sale, approximately NZ$5 million of earnings will be lost in the fourth quarter.

The Company is working urgently on additional plans to mitigate the impact of these adverse price movements.

The current market dynamics have proven difficult to predict and because of this uncertainty and the takeover process, the directors have decided that it is important to keep the market fully informed.

ENDS

Carter Holt Harvey (www.chh.com) is Australasia’s leading forest products company, with significant interests in wood products, pulp, paper and packaging, supported by forests. Carter Holt Harvey is listed on both the NZX and ASX, and employs approximately 10,500 people across New Zealand, Australia and Asia. The company's head office is in Auckland, New Zealand.

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