Net sales for the quarter improved $31 million to $943 million compared to the same quarter last year. Operating earnings before interest and tax (EBIT) were $68 million for the quarter, down $9 million on the same period last year, with the recording of a $9 million charge for the company’s equity based incentive plan, designed to align senior employees’ performance with shareholder interests.
Chief executive officer, Peter Springford said the solid result was underpinned by excellent performances at a number of the company’s businesses.
“Over the last quarter our Kinleith Mill achieved its best ever pulp and paper production volumes, translating into record volumes for paper sales. Our laminated veneer lumber (LVL) business also recorded its best ever sales volumes in New Zealand and international markets. In Australia our Radius and Woodlogic businesses achieved record product delivery performance during the quarter, demonstrating our focus on operational efficiency and achieving supply chain excellence.
“Despite the challenges of adverse foreign exchange rates and rising freight costs, these results show the benefit of the company’s ongoing focus on improving operating performance and reducing costs,” said Mr Springford.
On 25 March 2004, CHH announced it had entered into an agreement to sell its Tissue business and its 50 per cent interest in Sancella to SvenskaCellulosa Aktiebolaget (SCA) for $1.015 billion ($A890 million). The profit on the sale of these businesses is expected to be around $464 million.
Since this announcement, the company has reiterated its intention to grow its core business in the areas of Wood Products, Pulp, Paper and Packaging, supported by Forests.
“The strength of the Carter Holt Harvey balance sheet supported by our continued focus on operational performance allows us to move forward with confidence. We will continue to evaluate potential acquisition opportunities in a disciplined and structured manner focusing on our core strengths,” said Mr Springford.
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