Apr 20, 2005. /Lesprom Network/.  Carter Holt Harvey announced a profit from continuing operations of NZ$90 million ($65 million) after tax and revenues of NZ$748 million ($542 million) for the three months ended 31 March 2005.

 

Chief Executive Officer Peter Springford said although the results were consistent with the company’s expectations and forecasts, he acknowledged more work was needed to improve shareholder returns.

 

“Carter Holt Harvey has a clear strategy, a sound financial position and we are strongly focused on delivering improved future returns,” he said.

 

“Although market conditions during the previous quarter proved challenging, we have reshaped our business and are building scale in areas where our strength and expertise provide competitive advantage; namely wood products, and pulp, paper and packaging, supported by forests.”

 

Financial summary

Quarter Ended

Mar 2004

Dec 2004

Mar 2005

Revenue

770

834

748

Net FX gains Hedge income

40

35

31

Operating profit

77

85

49

Forest asset fair value change

Restructuring and non-recurring items

102

-

3

(14)

97

(3)

Income from associate companies

Finance costs

(1)

(16)

(1)

(13)

-

(11)

Tax expense

(51)

(13)

(42)

Profit from continuing operations

111

47

90

Net Debt to Total Capitalisation

20.2%

12.6%

14.6%

EPS for continuing businesses

6.4c

2.9c

6.9c

 

 

This quarter Carter Holt Harvey is among the first companies in the region to report under International Financial Reporting Standards (IFRS).  As a result, all goodwill amortisation will cease and mill maintenance shuts will be reflected in the quarter they occur. In addition, the company is bringing to account the change in the fair value of its forest assets quarterly as required by IFRS.  Adjusted for this, the profit from continuing operations would have been NZ$25 million  ($18 million) after tax.

 

Mr Springford said the first quarter result was influenced by the Australian building and construction market.

 

The first three months of the year are traditionally the slowest quarter for Carter Holt Harvey’s wood products business and the company is seeing the impacts of additional timber capacity and a softening in new housing starts in Australia.  These factors are directly influencing local demand and price, Mr Springford said.

 

“However the company remains strongly focused on delivering productivity and efficiency improvements across its wood products operations and continues to have confidence in the Australian market in the long term”, he said.

 

Carter Holt Harvey continues to improve its pulp operations in New Zealand with a NZ$37 million ($26 million) capital upgrade programme to the Tasman pulp mill planned over the next two years.

 

“We continue to build on our core areas of strength.  The recent successful acquisitions of PTP in China and Wadepack in Australia are also both performing in line with our expectations and providing a positive earnings contribution.” said Mr Springford.