Investors punish Nuplex after shakeup
Shares in resins manufacturer Nuplex fell 13 cents to $3.35 early this afternoon after the firm booked an almost flat interim profit and announced job losses.
The company made an interim net profit of $11.4 million for the six months to December 31, down just 0.3 per cent from the same period a year ago.
Shareholders will received a dividend of 10c per share, unchanged from last year.
One broker said news of further restructuring had disappointed investors who had pushed up the share price ahead of the result.
Chief executive Emery Severin announced that 30 jobs would go in Australia and New Zealand as the company moved to combat a fall in mining and manufacturing demand.
Sales in the region dropped nearly 20 per cent in the first half compared to a year ago, and a restructuring programme was under way to cut regional capacity by 30 per cent.
However "this is not enough to get us anywhere near where we need to be", Severin said.
As a result, the New Zealand and Australia businesses would be simplified into two units, resins and specialties. Most of the job losses would be at management level.
In other parts of the world, Nuplex was performing much better.
Totals sales revenue fell 1.6 per cent to $815.2m but operating ebitda (earnings before interest, tax, depreciation and amortisation) was up 3.3 per cent to $59.5m.
Sales of global resins were flat at $662.9m although volumes were up 3.4 per cent.
The strongest growth was in Asia where sales rose 11.6 per cent. Nuplex is building a third site in China and new reactors in Thailand and Indonesia.
Sales rose 3.5 per cent rise for coating resins in Europe, the Middle East and Africa, and 4.7 per cent in the Americas as their economies improved.
The company said a factory acquisition in Russia had been delayed by red tape.
In the specialties business, revenue fell 3.4 per cent to $152.3m.
Looking ahead, Nuplex said it was expected operating ebitda for the full year would be in the lower half of the $130m to $145m guidance given in November.
It expected European trading conditions to continue to stabilise and its American sales to show modest growth on the back of the US recovery.
Asia was continuing to grow, and the outlook for Australia and New Zealand over the next six months was mixed.
"We really see in Australia continued manufacturing weakness, but more improvement in New Zealand," Severin said.