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Nuplex boosts FY guidance for fourth time

Wednesday 24th March 2010

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Nuplex Industries, the resins maker that announced a first-half profit of $34.6 million January, has boosted its full-year guidance for the fourth time as the price of raw materials increases.

The specialty chemicals manufacturer announced an earnings before interest, taxation, depreciation and amortisation forecast of $125 million to $135 million, or 30 to 36 cents per share, in its first-half report ended December 31. That’s $5 million more than the range of $120 million to $135 million, announced in its January first-half result statement.

Chairman Rob Aitken said demand is recovering from the low point of the last financial year, but is still below the peak levels of 2007/2008.

“Nuplex is in a strong position,” he said in the first-half report. “We have a sound balance sheet and a good cash flow.”

Over the past year, the company undertook a major restructure, including selling shares at a deep discount, and introduced tight cost controls after a dwindling kiwi dollar drove the cost of its overseas debt amid falling demand for its products. Since then, they have posted a first-half profit of $34.6 million as demand out of Asia underpinned increased revenues.

The shares gained 2.4% to $3.40 in trading today, and have surged 334% over the past year. They are rated a ‘outperform’, according to a Reuters survey of six analysts.

Rising prices for raw material prices over the past four years makes the company confident, especially in Asia, which takes up 19% of the regional sales. The region is “performing strongly,” according to Aitken.

Earlier today, Nuplex announced the purchase of the ingredients business of Med-Chem group, which distributes medical and surgical equipment. Though the price wasn’t revealed, Nuplex said buying the group would lift earnings for its specialties unit by 15% for the first year.

Businesswire.co.nz

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