Australian housing helps
Carter Holt Harvey made $25 million on operating earnings of $68 million before interest, tax & restructuring items in the December quarter, compared to $42 million from $81 million in the December 2000 quarter.
The company made $15 million on $16 million operating in the September quarter, and a $34 million loss in the June quarter. The company has shifted its balance date from March to December: it made $6 million net for the nine-month year compared to $218 million the previous year, but sales for the nine months were a record at $3.154 million, compared to $2.854 million in 2000.
Carter’s Forests division achieved record export log sales and an improvement in prices in the December quarter.
The recovery of the Australian residential building industry from its worst slump in 25 years saw an improvement in both wood product volumes and a lift in prices in the last quarter.
Log inventory slashed
The company decided to cut inventory in June despite the prices, and by December had reduced it from 326,000 tonnes to 106,000 tonnes. The Korean market strengthened through the year with solid demand from the plywood & sawmill industries. Investment in infrastructure, particularly apartment projects, was strong.
The weak state of Japan’s economy resulted in log sales to that market dropping 20%. Prices in Japan generally eased during the year. Bellwether Japan A grade logs averaged $US52/tonne fob for the year, $US8 less than last year. Smaller-dimension Korean K grade logs averaged $US35/tonne fob, down $US5 on the previous year.
Average realisations for domestic logs fell due to a drop in demand for high-margin pruned logs from sawmills servicing the American appearance & mouldings markets. In the December quarter, 417,000 tonnes were sold as
Wood Products’ annual ebit halved, December quarter better
Wood Products’ ebit for the nine months was $31 million compared to $62 million in 2000, on sales up from $940 million to $1.05 billion. December quarter ebit was $16 million, up from the September quarter’s $11 million.
In Australia, December-quarter trading conditions were strong, buoyed by low interest rates and the first home owners grant. Improving market conditions enabled a 5% increase for structural timber products to be implemented in October.
Currently, demand remains strong and price increases of 5% for timber products and 3% for panel products have been announced, effective February.
The grant will continue for six months at a reduced level of $A10,000. Although there has been a fall in recent building approvals figures, November 2001 approvals were still 40% ahead of November 2000. In the private house category, building permits for the six months to November were 54% ahead of the previous six-month period.
The New Zealand construction market started to lift in the December quarter due to seasonal influences and lower interest rates, for an average price increase of 5%.
Marsden LVL on stream soon
December quarter timber production was 10% higher at 169,000 mÂ³ than the December 2000 quarter.
The Marsden Pt laminated veneer lumber (LVL) mill’s log peeler is almost completed and commissioning is expected by the end of March 2002. Planned LVL production is 35,000mÂ³ this year.
Carter expects the New Zealand building market to remain firm through at least the first quarter of 2002 as recent interest rate cuts, immigration inflows & housing consent increases support current levels of activity.