Wool exporter upbeat despite half-yearly deficit

Wool exporter upbeat despite half-yearly deficit

Despite announcing a half yearly deficit, New Zealand’s largest wool exporter, New Zealand Wool Services International Limited, is confident of a profitable second half of the 2006/07 financial year, says managing director Michael Dwyer .

“While our trading and scouring performance has been strong, the strength of the New Zealand dollar in recent times has impacted negatively on our financial position.  Consequently, we are reporting a post tax operating deficit of $1.245 million for the six months to 31 December 2006, compared to a surplus of $570,000 for the same period in 2005.

“This deficit is in line with advice given by the company in December. However, there are grounds to expect that the outlook for the second half of the financial year will be more positive, so long as the dollar continues to weaken,” he said.

According to Michael Dwyer, the New Zealand dollar was around its peak in this latest cycle on 31 December, New Zealand Wool Services’ reporting date, which accentuated the company’s unrealised losses.

“Aside from these losses the company achieved an operational profit for the six months that was in line with that of previous years. Already, over the past five weeks, a significant improvement in the unrealised currency position has occurred.

“New Zealand Wool Services achieved record sales during the latter half of 2006, indicating a strong second half of activity in the company’s two scouring plants. The first half of our financial year is traditionally slower than the second half. Our 65 per cent owned North Island scour, at Whakatu, is also now performing much better and more in line with the expectations around the plant following the $10 million upgrade that was commissioned early in 2005,” he said.

Christchurch-based New Zealand Wool Services International Limited is listed on the New Zealand stock exchange. It posted a $2.77 million tax paid profit for the year to 30 June 2006.

ENDS

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