Specialised resins manufacturer Nuplex Industries, which nearly became a casualty of the global financial crisis, is expected to post a big bounce back in its earnings when it reports its annual result today.
The company said at the time of its interim result that it expected to report record ebitda of beween $125 million and $135 million for 2009/10, largely driven by demand and improved margins.
The company noted, however, that there would be a negative foreign exchange impact due to the strong New Zaland dollar.
Forsyth Barr analyst John Cairns said he expected the company to report a result around the middle of its stated ebitda range, which would be a sizeable improvement on last year’s ebitda of just $67 million. “They are certainly back on track,” he said.
Mr Cairns expected a net reported profit, before abnormals, of $60.2 million, up from $23.5 million in the previous corresponding period.
The company, which was hit hard by the global financial crisis, came under severe financial stress in early 2009 and quickly moved to shore up its balance sheet by raising $159.5 million in new capital via a rights issue and share placement.
Mr Cairns said the capital raising was “overkill” and that he now regarded the company as being overcapitalised.
“I guess the issue with this company now is that it has basically ended up with an overcapitalised balance sheet,” Mr Cairns said.
The Securities Commission has filed civil proceedings against Nuplex for what it said was a breach of its continuing disclosure requirements during the period from December 22, 2008, until February 19, 2009, when Nuplex was under extreme financial stress.
The case will be heard in the High Court some time in 2011.
Thu, 26 Aug 2010