By Paul McBeth
Specialty chemicals maker Nuplex Industries has cut its annual earnings forecast after its half-year net profit slumped by $12.6 million.
The company blamed the strength of the currency and weak trading conditions in Australia and Europe for the result which saw net profit sink to $11.5 million for the six months ended December 31.
It was down from $24.1 million a year earlier, the company said in a statement.
Sales gained 11 percent to $828.7 million, while earnings before interest, tax, depreciation and amortisation increased 0.5 percent to $57.6 million, including restructuring costs
Underlying profit, which strips out the restructuring costs, fell 9.6 percent to $24.5 million.
That missed First NZ Capital's forecast profit of $18.6 million and ebitda of $66.1 million, and Forsyth Barr's estimates for underlying profit of $13.7 million on sales of $887.6 million.
Last year Nuplex flagged four plant closures and cut as many as 80 jobs in a bid to counter the rising cost of manufacturing in Australasia.
The cost-cutting initiatives were expected to remove $30 million in expenses in the 2013 financial year, and Nuplex said it's still on target to meet that.
"Whilst these restructuring and procurement initiatives impact this financial result, I am confident they will strengthen Nuplex's operations and start to deliver benefits as soon as the second half of this financial year," chief executive Emery Severin said.
"Keeping our focus on what we can control remains key to navigating the ongoing challenging business environment."
Nuplex cut its forecast annual ebitda to between $135 million to $140 million, from a range of $135 million to $150 million, blaming the strong kiwi dollar and weak Australian and European trading conditions. The guidance assumes exchanges rates and trading conditions remain the same in the second half.
The shares rose 0.3 percent to $3.47 in trading on Wednesday, and have gained 9.5 percent this year.