Viking rises despite dollar

Viking Pacific, the "good company" rising from the ashes of Skellerup Group, reported an $8.4 million profit for the June year.

The result is short of the $10 million forecast in July but is a solid recovery from the $2.9 million loss of 1999, the company's first year.

Revenue rose 2.5% to $354 million with all businesses contributing.

Chairman Sir Selwyn Cushing said margins also rose and overheads fell. But the negative effect of the lower New Zealand dollar on importing businesses appeared to be more pronounced than the positive impact on exporters.

"It is virtually impossible to expect the end consumer to totally absorb price increases necessary to protect the margins of importers and as a result earnings will come under further pressure," Sir Selwyn said.

Shareholders' funds rose $9.8 million to $80.1 million. Net bank debt fell $1.3 million to $81.6 million.

Viking sold equipment hire business Projex in September and negotiations for the sale of Harding Electronics' licensing division are almost complete. The proceeds will be used to repay debt.

Sir Selwyn said Viking was close to selling several of its businesses. The sales would result in lower earnings in the short run but a stronger balance sheet.

The company owns 11 businesses in New Zealand, Australia and the US, including Masport, Paykel, Skellerup Industries, and Flomax International.

Chief executive Donald Stewart said Viking would continue looking for export sales growth and cost-reduction initiatives.

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