Nuplex forecasts lift in 2014 earnings, largely flat markets

Wednesday 6th November 2013

Nuplex Industries, the specialty chemicals maker, affirmed guidance for a pickup in earnings this year, while reiterating that markets are expected to remain "largely flat" and the results will turn on trading in Australia and the Europe, Middle East and Africa regions.

Earnings before interest, tax, depreciation and amortisation are forecast to be between $130 million and $145 million, from $126 million in 2013, the Auckland-based company said in a statement issued in conjunction with its annual meeting today.

The forecast is based on the continuation of recent trading, which has been line with the outlook statement it gave with its 2013 results in August. That was for flat trading conditions in Australia and Europe, modest growth in New Zealand and the Americas, and steady growth in Asia.

"In New Zealand, Nuplex continues to expect some modest growth as building and construction activity levels improve," the company said. Australian economic data "is showing signs of improvement in the housing market" which is positive for building confidence in the medium term "but it will take time to translate into a consistent uplift in demand for our products."

European data "is encouraging for the medium term outlook" though for the entire EMEA region, markets are expected to remain flat in the current year, the company said. A steady recovery continues in the US while Asia is experiencing "growth across the region."

Nuplex said the range of its earnings guidance reflected the potential for trading in Australia and EMEA to be softer or stronger than expected. Its NuLeap cost cutting programme is forecast to deliver about $12 million of benefits in the current year, it said.

Nuplex shares last traded at $3.49 and have gained 10 percent this year, lagging behind the NZX 50 Index's 21 percent advance. The shares are rated 'hold' with a median price target of $3.52, based on a Reuters poll.

BusinessDesk.co.nz

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