By Paul McBeth
Shares in Skellerup Holdings sank 10 per cent after the industrial rubber goods maker reported an 18 percent slump in first-half profit, missing expectations, and cut its annual earnings forecast.
Net profit dropped to $9.5 million in the six months ended December 31 from $11.5 million a year earlier, the Auckland-based company said in a statement.
Sales slid 7.7 percent to $94.9 million. That fell short of Forsyth Barr analyst John Cairns' forecast profit of $11.1 million on sales of $101.5 million.
The shares dropped 16 cents to $1.48. The stock is rated an average 'buy' based on three analyst recommendations compiled by Reuters, with a median target price of $1.85.
Skellerup's weaker performance was put down to weaker sales from its industrial unit, whose demand tapered off after an earlier flurry from North American oil and gas explorers.
The company trimmed annual forecast net profit to $20 million from a range of between $22 million and $24 million, which was already down from last year's record $24.7 million.
"The 2013 financial year is shaping up to be a tougher year for the company than the previous one," chairman Selwyn Cushing said.
"Our customers have been impacted by unpredictable weather patterns and a slowdown in activity, but as we have seen in the past, orders can quickly turn and we must be ready for this."
In October, Skellerup warned it was facing a tougher year in 2013 and was investing in organic growth opportunities, which included shifting a dairy manufacturing plant to a new Christchurch site.
Skellerup's agri division reported a 4.1 percent in sales to $35.5 million and a 7.8 percent fall in earnings before interest and tax to $8.3 million. The industrial unit showed the bigger decline, with a 9.9 percent fall in sales to $59.4 million and a 29 percent slide in ebit to $7.8 million.