N.Z. Forest to pay 1.5c more

Press, 4 December 1979, Page 22

N.Z. Forest to pay 1.5c more

Commercial

N.Z. Forest Products, Ltd, in the six months to Sep-

tember 30. increased net profit 2.3 times, of $12.5M to $17.9M. The profit compares with 520.3 M for the whole of last i year, although in the first half of the year trading was unusually depressed. The interim dividend is ■ being increased 1.5 per cent, to 8.5 per cent (8.5 c a share) i and directors expect to be able to recommend a higher Tinal dividend. The figures for the halfyear confirm the improvement reported at the annual meeting. However, net profit was again reduced by the equity, accounting adjustment,! largely reflecting the continuing loss by N.Z. Particle Board. Ltd. Sales were a record 5212.8 M — a rise of $57,706,000 or 37.2 per cent

—and included export sales of S64M. An exchange loss of, $1,101,000 has been taken into account. The directors say the now accepted policy[ of spreading gain, or losses, over the remaining life of the; loans has reduced that part of the gain included in profit for the first six months' of last year to $321,000 and reduced" net profit for that period. Increased productivity at the Kinleith pulp and paper mills were the main factors in improving profitability. Output from both mills has been maintained at a ; consistently high level, and I the greater volume of production is fully covered by sales contracts. Demand in export markets improved. The earlier imbalance of supply and demand for pulp and paper

has disappeared, and prices are more satisfactory. Local demand has been maintained for all products. except building materials. The directors expect business to continue at the cur-, ; rent level for the rest of the financial year. They say major expansion will not be immediate, because the main increase in additional maturing forest will not be until the 19905. Plant is being installed at Kinleith to produce a bark extract with a high potential as a bounding agent. During the planting season about 3000 ha of new land was established and 2000 ha of cut-over forest replanted. The results for the halfyear do not include those of MSD-Spiers, Ltd, because the acquisition was not finalised until after September 30.