Jan 20, 2005. /Lesprom Network/. Carter Holt Harvey (CHH) today announced consolidated net earnings for the year ended 31 December 2004 of $435 million, compared with a net loss of $656 million in 2003. Net sales for 2004 were down 9% on 2003, primarily due to the divestment of the company’s Tissue business. When adjusted for the divestment, net sales were up 3% on 2003. Operating Earnings Before Interest and Tax (EBIT) for the year was $259 million, down $56 million compared to 2003. This was due to reduced earnings following the divestment of the Tissue business and charges (largely non-cash) associated with the company’s Share Growth Plan and Pension Fund. The company has continued to focus on improving productivity across the business, and this has contributed $113 million towards offsetting the $160 million impact of the higher New Zealand dollar and the reduction in hedge income compared with 2003. A key highlight for the year was strong production across the company. For the quarter, operating EBIT was $62million; $9 million, or 13% lower than the September quarter. The main reasons for this were lower pulp prices, the strong New Zealand dollar and lower sales volumes in the Wood Products segment. This was offset by record sales volumes in the Pulp and Paper segment. Carter Holt Harvey Chief Executive Officer Peter Springford said while the year had been demanding, particularly in relation to export markets, the company had made significant progress on a number of fronts during 2004. “While a number of external factors have impacted our operations during the year, we have been getting on with the fundamentals of improving productivity across the business and as a result we have achieved a broad-based improvement during 2004. “Production at our Kinleith facility achieved an all time record of 581,704 tonnes; 49,614 tonnes better than the previous best year in 2002. The Whakatane cartonboard mill wet-end upgrade is now consistently meeting ramp up targets, and our Penrose recycling mill capped off a good year with record sales volumes.We also saw increased earnings from our Packaging Australia business due to a focus on productivity, business restructures in the carton division, and improved sales mix in the corrugated division. In Wood Products, both Carters and our LVL business achieved record earnings during the year and total production across Wood Products was up 3% on 2003. “While it is pleasing to see an improvement in returns, they are clearly not yet at the desired level. During 2004, by focusing on our multi-domestic strategy of manufacturing close to our major markets, we have taken steps towards lessening the impact of external factors such as international freight rates, strong domestic currencies and energy costs on our operations. Our cross-company productivity drive also remains a priority. This has contributed to the bottom line in 2004, and I am confident there are further benefits to be realised in 2005,” said Mr Springford. “At the same time we have taken some important steps towards reshaping the business.We managed a very successful divestment of the company’s tissue business, and purchased China-based premium panels business Plantation Timber Products, which is performing very well. “Late last year we announced an agreement to purchase the structural timber, plywood and roundwood assets of Tenon Ltd, a move that will significantly strengthen our leadership position in the Australasian wood products market. The company’s off-market bid for Australian carton business Wadepack Ltd supports the development of our Australian packaging business and the announcement of the potential sale of a significant amount of the company’s forest estate has generated strong interest from prospective purchasers,” said Mr Springford. During the year the company distributed $583 million to shareholders in the form of dividends and a share cancellation, and reduced debt by $466 million. The company has declared a final dividend of NZ 4 cents per share for the year ended 31 December 2004.