Specialised resins maker and chemicals group Nuplex Industries enjoyed a strong rebound in its net profit for the 2009/10 year.The company announced a record after-tax profit of $64.2 million for the year to 30 June 2010, up 284% from the previous year's
Specialised resins maker and chemicals group Nuplex Industries enjoyed a strong rebound in its net profit for the 2009/10 year.
The company announced a record after-tax profit of $64.2 million for the year to 30 June 2010, up 284% from the previous year’s figure of $16.7 million.
This was after unusual items totalling $7.2 million (FY2009: $6.9 million).
Earnings before interest, tax, depreciation and amortisation (ebitda) were $139.4 million, up from $91.5 million, and ahead of the company’s own guidance of $125 million to $135 million.
This was after non-recurring costs of $9.2 million, which related to restructuring.
Earnings were affected by the strength of the New Zealand dollar compared with the previous year.
Gearing (net debt to net debt plus equity) fell to 12% from 20% a year earlier due to strong operating cash flow and a relatively low level of expenditure on acquisitions and capital equipment.
Chief executive Emery Severin said the profit increase occurred despite “volatile and difficult” economic conditions.
He said the result reflected actions taken a year ago to improve the company’s productivity, increase margins, and reduce operational costs and working capital.
Sales volumes of Nuplex’s manufactured resins were up 11% and earnings in local currencies were higher in all the company’s four regions – Australasia, Asia, Europe and the Americas.
While there was a small decline in reported sales revenue in New Zealand dollars, overall sales revenue in local currencies was higher than the previous year.
Lower raw material costs would normally have led to lower selling prices, but a strong focus on margin management ensured that margins returned to more acceptable and sustainable levels, he said.
Mr Severin said the company’s robust balance sheet would enable it to take advantage of growth opportunities.
Looking had, he said the group’s performance in 2010/11 will depend upon economic activity in is markets.
“While current volumes remain below the levels of 2008, demand is significantly stronger than a year ago,” he said.
Nuplex shares rallied by 20c to $3.15 after the result. The stock has traded in a $2.30 to $3.58 range over the last 52-weeks.
