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Nuplex forecasts record 2011 profit

Wednesday 3rd November 2010

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Nuplex said profit in 2011 will rise as much as 17% to a record provided the Australian and New Zealand dollars don’t appreciate much further and margins hold.

Net profit will be between $68 million and $75 million in the 12 months ending June 30, 2011, managing director Emery Severin told shareholders at its annual meeting today. That would top 2010’s record $64.2 million profit, which was a rebound from the previous year’s slump when the global financial crisis sapped returns. 

Severin said trading in the first quarter of the year has been similar to the second half of 2010, when it fattened margins, especially on sales of resins in Europe. Europe has “held up well” though there are some signs of softening in the auto sector. 

"We are wary of the historic high Australian and New Zealand exchange rates that may have an impact on the business," he said. 

Volumes have softened in southeast Asia and China though there are signs demand will pick up, especially in China’s auto industry. Demand has been steady in the U.S. and Australia while remaining weak in New Zealand. 

Shares of Nuplex were unchanged at $3.46 and have climbed 18% this year, while the NZX 50 Index is up just 2%. 

“There are still mixed signals coming from the global economy and the coating resins market,” Severin said.

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