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Nuplex profit rises 84% on sales growth, plant closures

Thursday 28th August 2008

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Nuplex Industries, New Zealand's biggest maker of resins used in paints and printing inks, posted an 84% gain in full-year earnings after it closed unprofitable plants and lifted sales.

Profit rose to NZ$48.3 million, or 60 cents a share, from NZ$26 million, or 33 cents, a year earlier, the company said in a statement. Sales rose 6% to NZ$1.53 billion.

Nuplex closed plants in Brazil and the UK, while adding lower-cost capacity in Europe, helping the company weather rising costs of raw materials and weakening demand.

The profit gain came in "a year when the international economy was challenging and we have had to face a considerable increase in costs driven by a higher oil price," said managing director John Hirst.

Nuplex shares rose 0.8% to NZ$6.35 and have surged 19% in the past month, while the NZX 50 was up 2%.

Earnings (EBITDA) from its resins unit rose 11% to NZ$99 million and earnings from its specialty materials unit gained 50% to NZ$22.8 million.

Hirst said resins will benefit from increased capacity in Europe and the US, cost reductions and more demand for environmentally friendly technologies. Its specialties unit, which sells materials used in plastics and coatings, will continue its turnaround, he said.

The company will pay a final dividend of 23 cents a share, boosting the year's payments by 19% to 43 cents.

By Jonathan Underhill

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