Transpacific Industries NZ posts earnings in 2012 after 2011 loss

BUSINESSDESK: Australian waste manager Transpacific Industries' New Zealand unit reports earnings for the 2012 financial year after a year-earlier loss that reflected an $A182 million writedown of goodwill on its local assets, largely on the Waste Management business bought in 2006.

Transpacific's New Zealand segment, which includes three landfills, reported a profit of $A84.1 million in the 12 months ended June 30 from a loss of $A99.5 million a year earlier.

Underlying earnings before interest, tax, depreciation and amortisation fell 1% to $89.8 million on a 3.4% decline in sales to $332.3 million as work related to the immediate aftermath of the Canterbury earthquakes slowed.

The New Zealand industrials unit lifted underlying ebitda 9% to $18.2 million, even as sales dropped 8.2% to $101.5 million from softer demand in manufacturing and heavy industry sectors.

"Conditions within the New Zealand economy remain subdued," the company says in presentation notes. Transpacific flagged local growth opportunities in supporting the Christchurch rebuild and with new contracts in Auckland's solid and liquid waste market.

The Queensland-based group reported a profit of $A32.2 million, or 0.9 Australian cents per share, from a loss of $A280.5 million, or 26.8 cents, in 2011.

The board did not declare a dividend in the 2012 year.

The shares fell 1.8% to 83 Australian cents yesterday and have gained 3.7% this year. The stock is rated an average "outperform" based on nine analyst recommendations compiled by Reuters, with a median target price of 90 Australian cents.

Transpacific competed debt refinancing in the period, reducing net debt to $A1.05 billion as at June 30 from $A1.4 billion a year earlier.

The waste manager has struggled with its debt levels after it embarked on a buying spree culminating with a $A1.25 billion purchase of Australian rival Cleanaway just before the global financial crisis in 2008.

The company also announced the departure of Cleanaway division boss Nick Badyk, saying he will be replaced by Boral executive Nick Clark.