Commercial N.Z. Forest results improved

Press, 3 February 1979, Page 16

Commercial N.Z. Forest results improved

PA Auckland A marked improvement in ■ New Zealand Forest Products. Ltd, sales and profits [in the three months to December 31 has brightened prospects for the full year result.

The company was securing in export' markets the benefit of higher selling prices for pulp and paper. “International markets have stabilised, and excess supply has largely disappeared. It can be expected that this will continue and indeed. improve during 1979,” the report said. Log sales to Japan had been affected by the comparatively depressed state of the Japanese economy, with some small reduction in supply but prices had improved slightly. Sales of sawn timber flitches were being maintained at satisfactory levels, and prices. The buoyancy in the New Zealand economy during the latter part of 1978 nhad assisted domestic sales of building materials, and also printing and stationery papers. The demand for packaging papers also rose, reflecting a higher level of manufacturing in New Zealand.

Some of the improvement comes from the domestic market, but much of it comes from export trading, where pulp and paper prices and business have picked up. Even with no tax liability for the six months to September 30 net profit was 40 jper cent down at S6.BM, but '“prospects are now brighter,” the chairman, Mr A. G. Wilson said.

“Manufacturing profits are also showing improvement, largely as a result of improved output from major production units. “The trading subsidiaries of the N.Z.F.P. group have all returned good results for

“Some slowing of the New Zealand economy can be expected from the measures itaken by the Government to .’damp down to some extent the excess liquidity and buoyancy which became apparent in the latter part of 1978,” Mr Wilson said.

“It is likely to depress demand in the New Zealand market especially for building materials. The company is well prepared for local adjustments of this type, and has the flexibility of considerable experience and market spread in export markets to which more of the company product is

the Octobe r-December t likely to be directed.” he period, and this has assisted in the over-all ini-1 Export sales ot company provement in net profit fig- products were running at an ures.” (annual rate of S9OM — they

I were $ 5M in the last financial year. ! Total sales for the six (months were 4.3 per cent I were S6SM in the last finaniper cent higher exports of S43M. I Assignments have been secured for the consulting service recently begun by New [Zealand Forest Products. The service is aimed at using and selling many of the skills the company has in engineering, production, marketing, and particularly forestry. Assignments so far have largely been in the Pacific Region, but it is also auditing a proposal for a pulp and paper plant in Mozambique.