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Nuplex Raises Dividend 10%

Media Release
22 February 2007



A strong performance from Nuplex’s international businesses enabled the Group to post an unchanged operating profit of $16.8 million for the six months ending 31st December 2006.

Directors have declared an interim dividend of 15.5 cents per share, 10% higher than the last year interim dividend.

The six months results include one off charges related primarily to ongoing restructuring in UK and Brazil. No further charges are anticipated for these operations and losses will be substantially reduced during the next 6 months with profits expected to be generated during 2008.

Net profit was further impacted by a high tax rate – however future tax benefits of $6.8 million should be achieved when all businesses move into profit.

Foreign exchange rates had a mixed impact on the reported result with improved returns from overseas operations but the requirement to write down hedging accounts, largely in New Zealand reduced EBITDA by $2 million.

With EBITDA of $49 million, up 4% on the prior year, the company remains on track to achieve its forecast annual result.

Resins continued to be the core business contributing 82% of group profit with operations outside historical New Zealand and Australia markets growing by 37% over the prior year, giving a strong endorsement of the international expansion strategy.

Group sales grew by 20% to $723 million with higher unit prices and the impact of the portfolio switch from Environmental Services to the PML Group.

Results for the PML Group acquired in December 2005 were solid and in line with pre acquisition expectations.

Great progress was made towards finalising Specialty Products business restructure with the target for completion before the end of the current financial year. Proceeds from this restructuring are expected to be in the region of $40 million.

Raw material shortages and cost increases averaging around 10% over the prior period made for a difficult trading environment. Markets in mature economies were generally soft to steady wile Asia demonstrated strong growth. Nuplex businesses performed well and produced a quality result in difficult conditions.

European business restructuring is delivering early results and the outlook is for this to continue to rapidly improve over the next 3 years. The Group has a number of other strategic initiatives to increase market share and profits, and ensure sustainable growth in every business. Huntsman Composites, an Australian based operation was acquired in January to build critical mass and ensure a sustainable business to support the local customer base.

Raw material costs are expected to peak, and retreat during the next few months with reasonable prospect of recovery of margins, which have been severely pinched after 3 years of constant petrochemical cost pressure.

With a second half result expected to be stronger than the first, the full year EBITDA is expected to better last year’s record performance to achieve a result of $103 -110 million, in line with previous guidance.

The 15.5 cps will be paid on Thursday 5 April 2007 to shareholders on the register at the close of trading on Friday 23 March 2007. Overseas shareholders will receive a supplementary dividend of 1.433 cents per share.


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