Published: 29 March 2005
Carter Holt Harvey Ltd said today its first-quarter operating profit would be down by about one-third under a change in accounting rules, but it expected an even greater forest revaluation gain.
Meanwhile, it said, demand in the residential building sector still hadn’t picked up after the traditional Christmas slowdown. But it expected better market conditions in the 2nd half and expected the underlying overall financial performance to be in line with expectations, assuming forex & pulp prices are at forecast levels.
That last sentence isn’t a full direct quote but is an abbreviated version of what the company said in a statement to NZX today.
The result will be the company’s first under International Financial Reporting Standards (IFRS). Carter Holt said it would report the result in April and would be one of the first companies in the region to report financial results under IFRS.
It expected its first-quarter operating profit to fall from $77 million last year to $45-50 million this year.
But there would be a $90-100 million increase in profit for the value of the forest asset, taking it to $1.565 billion.The key factors affecting the operating profit are the requirement to take the full impact of maintenance shutdowns during the quarter, cessation of goodwill amortisation and softness in demand for wood products, particularly in Australia.
Carter Holt said the forest asset would be revalued quarterly under IFRS, taking into account changes in average price during the quarter as well as what has been harvested and what growth occurred over the current quarter. Price improvements during the March quarter are the main reason for the forecast increase in value of the forest asset.The company will release full details of the quarter’s result on Wednesday 20 April. Its tenders for the sale of 41,000ha of land & 95,000ha of trees close 2 days later, on Friday 22 April.