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Skellerup profit dips on Aust mining woes

NZ Newswire logoNZ Newswire 15/02/2017 Tina Morrison

Skellerup Holdings' first-half profit has fallen 7.5 per cent due to weaker sales to the mining sector in Australia.

Profit slid to $8.9 million in the six months ended December 31, from $9.6m a year earlier, the Auckland-based company said in a statement.

Revenue declined 9.5 per cent to $97.3m.

Skellerup's industrial division, which supplies polymer products and vacuum pump equipment, posted a 6.2 per cent drop in earnings before interest and tax, primarily due to lower sales into the Australian mining sector and the impact of a stronger New Zealand currency.

Earnings edged up 1.5 per cent at its agricultural unit, which provides rubber products to the dairy industry, as the performance of the US, New Zealand and Australian markets offset weaker European demand.

Developing new products in international markets and solid agri sales in the New Zealand market only partially offset the effects of lower sales in some commodity-affected markets and the strong New Zealand dollar, chairwoman Liz Coutts and chief executive David Mair said in a statement.

However, recent improvements in dairy prices were an encouraging sign and the second part of the year was traditionally a stronger half.

"We are cautiously optimistic regarding the prospects for the coming six months," they said.

"We have also seen a lift in the oil, gas and iron ore prices, which influence our industrial division's results. The improvement of our product range across all of the businesses in this division underpins prospects for the second half of the year."

The company retained its forecast for annual profit of between $20m to $22m, from $20.5m a year earlier.

Its net debt stood at $35.6m, up from $17.6m a year earlier.

Its shares last traded at $1.61 and have gained 20 per cent over the past year.

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