Carter Holt pulls $A55.4m dividend from Australia in 2016

The Australian unit's holding company paid a dividend bigger than its profit of $A21.3 million in calendar 2016.

Carter Holt Harvey Group pulled out an A$55.4 million dividend from its Australian unit in 2016, its first such return after several years of shoring up the wood products company's books.

The Australian unit's holding company, Carter Holt Harvey Building Products, paid a dividend bigger than its profit of A$21.3 million in calendar 2016, down from A$30.7 million a year earlier, financial statements lodged with the Australian Securities & Investments Commission show. While revenue edged up 3.1 percent to A$964.7 million, the company's gross margins shrank to 8.6 percent from 9.5 percent in 2015. Still, the forgiveness of A$275 million of related party debts between 2012 and 2014 helped the Australian division get back on an even footing after slipping into negative equity and operational cash flow climbed 42 percent to A$62.3 million in the latest year.

Carter Holt's billionaire owner, Graeme Hart, tested the waters for an initial public offering of the forestry group in 2015 before shelving those plans indefinitely. A year earlier, Hart's Rank Group sold the Carter Holt Harvey's pulp and packaging businesses for $1 billion to Japan's Oji Holdings Corp and Innovation Network Corp of Japan.

The Australian operation is currently in a dispute with the Construction Forestry Mining and Energy Union, locking out about 200 workers at its Myrtleford ply board manufacturing site when pay negotiations broke down. The company's Australian wage bill rose 6.4 percent to A$159.8 million in 2016, while pension contributions were flat at A$11.8 million. The manufacturer employs 1,700 people across 12 factories and six distribution and sales centres in Australia, according to its website.

Carter Holt Harvey Building Products reported an A$10.8 million tax expense in 2016 compared to A$10.1 million a year earlier, although its cash-flow statement showed it paid A$1.3 million to a related entity for the transfer of tax balances in 2016, down from A$5 million a year earlier. In separate accounts for Rank Group's head tax entity in Australia, Burns, Philp & Co, it said it anticipated Carter Holt Harvey's Australian business "will continue to purchase tax losses from the group during 2017" which will be paid in cash.

Carter Holt Harvey is made up of three divisions: building products makers Wood Products NZ and Wood Products Australia, and building products trade and retail supplier Carters.

(BusinessDesk)