Support our sponsors:

NZX 50 Index	3315.14	2.90
S&P/ASX 200	4277.20	18.80
Dow Jones Industrials	12845.10	17.10

Twitter

Facebook

RSS

Daily ShareChat: Nuplex

By Jenny Ruth

Thursday 2nd September 2010

Text too small?

Nuplex produced a solid result ahead of expectations, says John Cairns, an analyst at Forsyth Barr.

Nuplex reported earnings before interest, tax, depreciation and amortisation (EBITDA) of $139.4 million for the year ended June compared with Cairns' forecast of $131.4 million.

"The 2010 result benefited from the extensive restructuring initiatives from the previous year focusing on productivity and the reduction of operational costs," he says.

The company's sales volumes of manufactured resins were up 11% on 2009 and earnings in local currencies were higher in all regions.

Net debt at June 30 of $72.4 million, including $52.5 million of capital notes, gave Nuplex a 12% gearing ratio.

"The Nuplex strategy in the current environment is on sustaining and improving margin," Cairns says.

"This is being achieved through targeting higher value resins incorporating proprietary technology in consultation with customers."

But while 2010 resins volumes recovered from the depressed 2009 levels, they were still below 2008 levels.

"The rate of growth in Chinese resin demand is slowing but is now growing at a more sustainable rate," he says.

Nuplex is encountering capacity constraint in Asia and is planning capacity upgrades.

Cairns is forecasting Nuplex's EBITDA in the year ending June 2011 will be little changed from 2010 at $139.7 million, although that's up from his previous $129 million forecast.

Recommendation: Accumulate.

Daily ShareChat articles report how the main experts in the market might view a certain share and we provide this commentary as a useful resource for investors. Content on this site does not in any way constitute a recommendation to buy, hold or sell any particular share. Investors should always seek professional advice before making any investment decisions.

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Printable version

Get quotes for Nuplex Industries Limited Ordinary Share (NPX)

NZX Annoucements for NPX

20 Jan 2012	JOINTV: NPX: Nuplex MOU to establish a Russian Joint Venture
20 Jan 2012	RELINT: NPX: DISCLOSURE NOTICE - OFFICER'S RELEVANT INTEREST
19 Jan 2012	RELINT: NPX: DISCLOSURE NOTICE - OFFICER'S RELEVANT INTEREST
16 Jan 2012	SSH: NPX: SSH Notice - ("ACC")
4 Jan 2012	GENERAL: NPX: Nuplex Completes Viverso Acquisition