A surge in sales to China, higher world log prices and continued cost cutting have delivered New Zealand-based packaging provider Carter Holt Harvey a solid NZ$73 million (€34.8m) for the six months to June, compared with a loss of NZ$15 million for the same period last year.
The profit jump came in part from a 7 per cent rise in revenue to NZ$2.023 billion from NZ$1.89 billion last year.
Touting a strong balance sheet, with greatly reduced debt and capital expenditure, the Carter Holt result exceeded many expectations by reporting solid growth in all its business divisions apart from pulp and paper.
The Forests division reported earnings NZ$35 million higher than for the same period last year, selling 660,000 tonnes of logs, bringing in pre-tax earnings of NZ$63 million.
Chief executive Chris Liddell said this good result came from strong markets in New Zealand and Australia, with better sales volumes and prices.
The Pulp and Paper division was the only part of the Carter empire to have had a reversal in fortune over the past six months. Earnings before interest and tax dropped from NZ$26 million to NZ$10 million.
Packaging and Tissue divisions both earned more money in the six months to June than in the same period last year.
Liddell said future prospects were balanced. Some divisions were looking at stable sales while others, such as wood products, might decline.
He released figures showing growth in sales to China of more than 350 per cent and emphasised how important the growing Asian market was for the long-term future of the company.
"Asia is crucial. Australia, in the short to medium term, is the real engine of our growth. It has been over the last couple of years.
"If we get the same sort of market position in Australia as we have in New Zealand, that'll drive a lot of growth. But when we look at the size of the company, then Asia has got to be critical, medium to long term." Liddell said the idea was to focus the company's productive capacity in New Zealand and Australia. He did not see growth through either buying or building facilities in Asia.
Asia as a market was much more stable now than it had been in the past, in part due to the emergence of a large Chinese domestic market.