German purchase hits Nuplex profit

Chemicals company Nuplex has reported a 6 per cent fall in annual net profit to $62.5 million, as it booked the costs of acquiring German resin business Viverso.

The Auckland-based company said earnings before interest, tax, depreciation and amortisation were steady year-on-year at $131m.

Chief executive Emery Severin hailed that as a "credible result considering the softer market conditions experienced in Asia and Europe and the particularly tough trading conditions faced in Australia and New Zealand".

The company had a stronger second half for the year ending June 30, with improved unit margins following price rises in its global resins segment, better-than-expected benefits from its operational improvement programme - which delivered $14m in benefits during the year, and the first full six months earnings contribution from Viverso.

"Combined these factors offset the impact of lower volumes in our global resin segment and the stronger New Zealand dollar."

As a result group sales revenue increased 2.6 per cent to $1.62 billion.

Nuplex booked $3.6m in unusual charges, including $3.03m relating to the acquisition of Viverso.

The company said it planned to increase its Asian capacity by 50 per cent by the end of the 2014 financial year.

It is reviewing its Australia and New Zealand operations, which have seen sales fall due to weak demand in both countries' construction industries, and said it would update investors by the end of the calendar year.

Severin said it expected the current challenging business and market conditions to continue throughout the 2013 financial year.

"Our focus will remain on managing costs and margins as well as improving our operational performance to enable us to navigate these difficult times and ensure we are well placed to capture the earnings upside when conditions improve."

Nuplex declared a full-year dividend of 21 cents per share.

Its shares have slipped 1 cent on the NZX this morning to $2.66.