2 May 2013
NZ drought and slower global recovery reduces Skellerup Earnings
The very dry NZ summer and sluggish international demand has caused Skellerup
to reduce its expected full year earnings expectations. NPAT for the June
year end is now forecast at NZ$17 million - down from NZ$20 million forecast
in February.
Chief Executive Officer David Mair said: "The drought conditions experienced
in NZ have negatively impacted our Agri business. Sales of both dairy liners
and rubber footwear have been below expectations. Whilst the very recent
rain is a welcome relief for our customers and Skellerup, we will not fully
recover the deferred sales within the current financial year as farmers will
delay some of their buying till the new season."
Demand from Skellerup''s North American & European customers across both the
Agri and Industrial divisions is also tracking below previous expectations.
"We were not anticipating any growth in European markets but we did expect
more improvement than we have seen to date in North America. In the US,
farmers are still recovering from last year''s drought and their spending on
dairy liners and tubing has been more subdued than we expected. Also in the
US, vacuum pump sales have and continue to improve on the first half but at a
lower rate than we forecast. In Europe, sales of snow ski boots have been
slow impacting on demand for our closed cell foam product - the manufacture
of which was successfully relocated to Vietnam in the first half of the
current financial year. This has reduced the gain we expected from this move
in the second half of this year.
Skellerup will report its full year result on 21 August. Mr Mair said: "The
reduction in our expected earnings is disappointing. However, this is not
detracting from our focus and progress on improving our underlying businesses
by controlling the things we can control."
For further information please contact:
David Mair
Chief Executive Officer
021 708 021
Graham Leaming
Chief Financial Officer
021 271 9206
For media queries please contact:
Geoff Senescall
Senescall Akers Limited
021 481 234
End CA:00235767 For:SKL Type:FORECAST Time:2013-05-02 08:49:00