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Nuplex shares plunge 7.8% after profit warning

Friday 16th December 2011

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Shares in Nuplex Industries tumbled after the resins maker flagged 2012 earnings will be as much as 10 percent lower than the previous guidance in the face of slowing global demand.  

The shares dropped 8.2 percent to $2.23 after the Auckland-based company said earnings before interest, tax, depreciation and amortisation would be 5 percent to 10 percent below its forecast $131 million. That would see earnings of $118 million and $124.5 million in the 12 months ending June 30, meaning profit growth could stall.

“With no material improvement in trading conditions expected for the remainder of the 2012 financial year, volumes in Nuplex’s ANZ (Australia and New Zealand) Resins segment are now expected to be down by approximately 6 percent year on year,” the company said in a statement. “Overall volumes in FY2012 are now expected to be down approximately 3 percent to 5 percent on the prior year.”

Nuplex said first-half earnings are expected to be $57 million, 12 percent lower than $65 million in the 2011 year, with net profit likely to be $23 million in the six-month period, down from $31 million.

Still, it said the interim dividend will be of a similar amount to the 10 cents per share paid to investors in 2011.

The company has been on a buying spree this year, purchasing Viverso in Europe for 75 million euros from Bayer MaterialSciences and spending A$23.5 million on Acquos’ Masterbatch business in Australia.

Nuplex said it hasn’t changed the forecast contribution from the two new acquisitions.

In October, the company scotched a plan to lift the pool for directors’ fees after some shareholders raised concerns about the period and quantum the increase was to cover.


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