Fletcher expects $110M profit

Press, 10 November 1983, Page 23

Fletcher expects $110M profit

PA Wellington Predicting a profit of $llO million for the current year, the chairman of Fletcher Challenge, Ltd, Mr Ron Trotter, said it was tempting to avoid taking the risk of naming a profit figure at the annual meeting in Wellington yesterday. Mr Trotter said “At this meeting last year, for the first time I gave a specific forecast of this year’s profit and was proved wrong. It is tempting to avoid taking the same risk this year.” He said that his predic-

tion of $llO million would include a full' 12 months profit from Canada, including deferred income, as against three months of last year (to June 1983) and this anticipated a doubling of earnings for the group. He added that it was the company’s intention to keep shareholders and the Market as fully informed as possible. “The four months trading in the year, although not exciting, has been' quite solid and is ahead of last year.

“There have been excellent spring rains throughout the country and fanner confidence has improved. “In some districts last year’s drought and a difficult winter will result in lower lambing percentages and wool weights this season.” Mr Trotter said that construction workloads in New Zealand and Australia are still declining except for the major projects. “Housing starts are showing a significant increase which will benefit not only

our residential construction activities, but also building materials, timber and wood products. In the past two months, there has been a worth-while increase on last year in motor vehicle and appliance sates,” Mr Trotter noted in his speech. He said that newsprint demand had improved but prices remained low and are not expected to improve until later in the year. Market demand for chemical pulp was firm, prices had started to increase, and prospects were better.

Mr Trotter said the company was expecting a modest operating profit for the full year in both Tasman Pulp and Paper and Crown Forest Industries. The financial services sector was expected to finish with another good year. “We are carrying a substantial level of debt and the fall in interest rates will improve the current year’s results.” Mr Trotter said that although inflation was lower real interest rates were still high.