INDEPENDENT NEWS

Wool Services FY profit falls 66% on drop in wool prices

Published: Wed 5 Sep 2012 10:45 AM
Wool Services FY profit falls 66% on drop in wool prices
By Hannah Lynch
Sept. 5 (BusinessDesk) - New Zealand Wool Services International, the wool scouring and exporting business whose majority shareholding is up for grabs, posted a 66 percent drop in full-year profit as wool prices tumbled.
Profit was $2.2 million in the 12 months ended June 30, from a record $6.6 million a year earlier, when wool prices surged in the face of global demand and a supply shortage. Sales rose 0.9 percent to $202 million.
The company warned last month that profit would miss its guidance because of a “sharp” decline in wool prices in April-to-June and what it called “unprecedented high volumes” offered in July. The company also has been forced to cope with a stubbornly high New Zealand dollar, which erodes the value of export sales.
Reduced consumer demand in Europe, particularly for floor covering, a fall in China's textile industry and a drop in the consumption of carpet wool in Australia also contributed to the profit decline, WSI said today.
"The market outlook for wool depends largely on the performance of wool markets, and as such remains uncertain," WSI said. "We remain positive despite the international downturn - this confidence is evidenced by recent wool sales where prices have shown a firming tendency."
Improvements to WSI Kaputone Wool Scour over the next twelve month will also help "improve processing profits" to "achieve a satisfactory full twelve month result - better than the year under review," it said.
A 64 percent stake in WSI is up for grabs because it was owned by the Allan Hubbard-related companies Plum Duff and Woolpak Holdings, which are in receivership.
WSI’s scouring assets attracted Cavalier Wool Holdings, a joint venture between carpet-maker Cavalier Corp, Accident Compensation Corp and Direct Capital Investments, which wants to create a national monopoly on scouring and has received sign-off from the antitrust regulator.
WSI shares were unchanged at 37 cents and have shed 26 percent this year. The company didn’t declare a final dividend.
(BusinessDesk)
BusinessDesk
Independent, Trustworthy New Zealand Business News
The Wellington-based BusinessDesk team provides a daily news feed for a serious business audience.
Contact BusinessDesk
Email:

Next in Business, Science, and Tech

Major New Zealand Upgrade Programme Projects Go To Tender
By: NZTA
Reserve Bank Seeks To Preserve Benefits Of Cash
By: Reserve Bank
Double-dip recession next year, but housing rolls on
By: RNZ
Microsoft Expands “Highway To A Hundred Unicorns” Initiative To Support Startups In Asia Pacific
By: Microsoft New Zealand
Fonterra Farmers Taking Another Step Towards New Zealand’s Low Emissions Food Production
By: Fonterra
New Zealand Remains In Top 10 For Energy Balance
By: Business NZ
Businessman Eric Watson sentenced to a four-month jail term
By: RNZ
OECD Area Employment Rate Falls By 4.0 Percentage Points, To 64.6% In Second Quarter Of 2020
By: OECD
Spark Turns On 5G In Auckland And Offers A Glimpse Into The Future Of Smart Cities
By: Spark
Monthly Migration Remains Low
By: Statistics New Zealand
Proglacial Lakes Are Accelerating Glacier Ice Loss
By: University of Canterbury
Fonterra Sells China Farms
By: Fonterra
New Zealand Moves To Protect Cash
By: Next Payments
Zoom Your Lens Over Bright Spots Dazzling In The NZ Economy
By: Kalkine
New Zealand And Uruguay Unite On Reducing Livestock Production Emissions
By: New Zealand Government
View as: DESKTOP | MOBILE © Scoop Media