Sharechat Logo

Daily ShareChat: Nuplex Industries

By Jenny Ruth

Wednesday 10th March 2010

Text too small?
 Jenny Ruth

Resins company Nuplex's first-half earnings before interest, tax, depreciation and amortisation (EBITDA) of $68.8 million was ahead of his $64 million forecast, says Forsyth Barr analyst John Cairns.

The 10 cents a share first-half dividend was also ahead of the 7 cents he expected.

He has raised his forecast for full-year EBITDA by 4.1% to $131.4 million and raised his valuation from $3.26 a share to $3.61.

The company is expecting raw material costs to rise significantly and while it may recover some costs, a contraction in operating margin appears inevitable, Cairns says.

He says during the first half, resins demand varied with Asia the stand-out performer and European operations were boosted by increased exports to China. However, local European demand remained subdued and North American demand remained soft. Nuplex is focused on moving out of commodity resins into specialty resins, Cairns says.

Australian demand was resilient and there were signs of recovery in New Zealand towards the end of the first half.

Nuplex has raised its profit guidance three times since early November. "Whilst the upgrades are encouraging, the frequency of the upgrades highlights the uncertainty over market conditions, in particular the sustainability of underlying global resin demand and the impact of higher raw material input prices," Cairns says.


BROKER CALL:  Forsyth Barr  rate Nuplex as hold.




  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Nuplex targets half billion dollar Asian sales within five years
Nuplex FY profit drops 31 percent on weak ANZ, EMEA markets, writedowns
Nuplex cuts FY guidance again as Australian manufacturing splutters; stock drops
Nuplex 1H profit misses forecasts; annual guidance cut on strong kiwi, weak trading conditions
Nuplex looks at imputing future dividends, flags increased earnings
Nuplex plans restructuring in Australia, NZ to cut 2013 profit
Nuplex FY profit falls, guidance met
Nuplex raises US$105M in US private placement
Nuplex sees full-year earnings at bottom of range
Nuplex 1H profit drops 23% on Australasian weakness