N.Z. Forest earns $52M

Press, 12 May 1981, Page 18

N.Z. Forest earns $52M

N.Z. Forest Products, Ltd, has increased its dividend from 18.5 to 22 per cent after a 78 per cent profit jump to $52 million in the year ended March 31. ’ The directors announced yesterday a final dividend of 12 per cent, of which' 5 per cent, will be tax-free.

They said that changes in accounting methods relating to forestry costs increased the result by $5 million. Sales were 32 per cent higher at $544,300,000, and exports rose 15 per cent to $136,800,000. Taxation on current income was $1 million lower at $4,300,000 — the comparatively low figure reflecting incentives from exports and new forest planting. The directors said that the year was a challenging ope. In the early months export sales suffered because of the need to rebuild stocks from the abnormally low levels of March last year, which were affected by strikes. The demand from export markets for pulp had been maintained, but prices were back from the peak levels of a year before.

Competition had been keen in world markets for paper, and again some price reductions had to be accepted. Sales of logs and timber to Japan continued at lower volumes and prices. The directors said that on the local scene there had been no improvement in the housing industry, and keen competition for the sale of timber and other building products had continued.

The demand for packaging papers and boards had been erratic, with a recent downturn forcing a series of planned shutdowns on the Whakatane board machines. All other paper machines had been fully utilised. * They said that trading was likely to continue at present levels in the early months of the present year, with an improvement from then bn. They said that the challenge was to improve on the latest results in the face of continuing inflationary factors affecting production and distribution costs.

The equity-adjusted profit covered a full year for all trading companies in the group apart from Moore le

Messurier Pty, Ltd, (nine and a half months), Tanner Couch, Ltd, (six months), and N.Z. Particle Board, Ltd, (11 months). The results also included for the first time six months contribution from the 40 per cent interest in U.E.B. Industries, Ltd. The equity contribution from associate companies amounted to $4 million previously a loss of $300,000). Group depreciation rose $1,900,000 to $18,500,000, and the result was after ex-

change losses of $2,500,000 (down $200,000). The earning rate on shareholders' '• funds improved from 10.4 per cent to 16.1 per cent; the return on capital rose from 41 per cent to 54.7 per cent. The directors said that during the year shareholders’ funds advanced by $68,100,000 to $357 million. Capital was increased $9 million to $80,400,000, reflecting acquisitions ,(8,904,631 shares) and staff issues.