Fletcher Can. result behind

Press, 21 July 1989, Page 14

Fletcher Can. result behind

Although Fletcher Challenge Canada’s second quarter result to June 30 was down 21.5 per cent to $NZ47.4 million it was still the second highest total profit recorded for the period. Fletcher Challenge’s chief executive, Mr Hugh Fletcher, said in a statement yesterday that the record had been set in the previous June quarter. The result compared well with major competitors, he said. The decline in the New Zealand dollar against the Canadian dollar had a positive effect on earnings in New Zealand dollar terms.

In the Canadian context, the stronger Canadian dollar against the U.S. dollar continued to erode returns from product sales which, for the most part, we transacted in U.S. currency. Fletcher Challenge, the parent Company, remained on track to achieve earnings of $650 million for the year ended June 30, he said.

President and chief executive officer of Fletcher Challenge Canada, Mr lan Donald, said that although the market for newsprint had clearly eased the most significant impact on the first-half results was the increase in the value of the Canadian dollar against the U.S. dollar. The effect of this change reduced earnings by sCanl6M (SNZ23.SM). Although acknowledging weaker newsprint markets, Mr Donald said that markets for kraft pulp and lightweight coated paper continued to be strong throughout the half. Wood products’ markets were firm overseas, but weaker for dimension lumber in domestic North American markets.

Buoyed by excellent pulp markets, Fletcher Challenge Canada’s associate companies contributed $29.2M to pre-tax earnings in the first half. Mr Donald said the results were consistent with earlier predictions and although the record 1988 results would not be repeated Fletcher Challenge Canada still expected to turn in another strong performance in 1989.

Results from Crown Forest Industries are not included in the earnings of Fletcher Challenge Canada.

Fletcher Challenge Canada half-year ended June 30 Sales . 1989 ($NZ M) 1029.2 1988 ($NZ M) 926.5 Change % +11.1 Pre-tax profit. . 182.3 199.3 -8.5 Group net profit 105.0 116.5 -9.9 Total profit . . . 104.4 116.5 -10.4 Result in Canadian dollars 1989 1988 Change ($Can. M)($Can. M) % Sales 701.6 749.7 -6.4 Pre-tax profit. . 124.3 161.3 -22.9 Group net profit 71.6 94.3 -24.1 Total profit . . . 71.2 94.3 -24.5