Nuplex Rewards Shareholders
Nuplex Rewards Shareholders Following Operational And One Off Profit Gains
Statement made by Fred Holland, Chairman, Nuplex Industries Limited
New Zealand multinational resin manufacturer, Nuplex Industries, is rewarding shareholders with a record gross dividend payout for the full year of 44.4 cents following an 87% lift in audited after tax profit to $62 million for the year ending June 30 2006. This includes a one off gain of $24 million from the sale of a business.
The operating profit of $38 million was an increase of 15% over last year’s operating profit.
Operating earnings per share (excluding the one off gain) were 49 cents, up 2.6 cents.
While demand in most of our markets is likely to remain flat in the current financial year, we anticipate steady growth for operational earnings in the coming 12 months.
During the year we achieved our earnings expectation even though the period was a transitional one for Nuplex as we consolidated and restructured from being an Asia Pacific regional operation into a true multinational with representation in 15 countries.
Underlying earnings before interest, tax, depreciation and amortisation
(EBITDA) increased by 27% to $103 million.
Today our specialist focus is on the development, ownership and application of world leading intellectual property associated with the use of resin technology, and 82% of our operating profit came from our global resins business.
The one off gain came from the sale of our environmental services business in November 2005. While a profitable and substantial operation, this business was not a core activity.
The operating profit contribution from businesses that we will continue to own in 2007 was up 24% compared on that for the previous 12 months.
For the first time Nuplex lifted revenue above the one billion dollar mark, achieving sales revenues of $1.3 billion, up 40%. A major contributor to this growth was a full year’s revenue from the resins business acquired in January 2005 (six months contribution in the previous year).
Within our global resin business we made substantial progress in bedding down and integrating our new European, North and South American, and Asian operations with our traditional Asian, Australian and New Zealand business units.
Trading in New Zealand and Australia was flat while Asia provided high growth. A significant milestone was reached with our combined China manufacturing operations registering a modest, inaugural operating profit. Stronger demand developed in Europe and the Americas, and these operations achieved improved market success.
Some business units underperformed, and turnaround programmes are in place to improve these operations.
Escalating crude oil prices and refining and petrochemical capacity shortages drove up raw material costs throughout the year, and increased our investment in working capital. While these costs were generally recovered, there was a time lag, and competitive activity also put pressure on margins.
The outlook for the coming 12 months remains positive, with Asia forecast to continue to grow while other markets are expected to remain steady.
Our ability to make sound progress in such a mixed environment underlines the benefit of operating across regionally diverse markets.
A weaker New Zealand dollar will increase returns from international operations in New Zealand dollar terms while raw material costs are expected to remain high for the foreseeable future, requiring a continued focus on margins and working capital.
The final dividend payment for the year has been struck at 19.5 cents, increasing the total dividend for the year by 12%. The final dividend carries an imputation credit of 4 cents. The dividend payout represents 69% of operating profit (57% in 2005).
The final dividend will be paid on Friday, October 20, to shareholders on the register at the close of trading on Friday, October 6.
Financial Statements are available on the Company’s web site: www.nuplex.co.nz