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Source: Reuters
Tenon, a seller of New Zealand timber mouldings and appearance grade lumber to the US housing market, is putting a positive spin on a bottom line $US1 million ($NZ1.93) interim profit.
The net profit after tax in the six months to December 31 was down from $US2 million in the same period last year.
Tenon says the current market conditions are unprecedented and conditions will be tough for the rest of 2009 - but there are some positives on the horizon.
Tenon's share price fell 10 cents to 40 cents, though it was on tiny volume. The company is 57.37% owned by Rubicon, a remnant from the Fletcher Challenge empire, and 18.06% owned by Third Avenue Management.
Tenon lists improving availability of mortgage credit for qualified borrowers in the US, an increase in housing affordability because house prices have fallen, lower interest rates and the US Federal government's stimulus package as positive factors.
"Taking all factors into account, the most likely outcome is for a flattish second-half earnings," the company said.
Tenon also argues that it is a niche player and has a strong distribution network.
The accounts reveal that the company refinanced its bank debt on July 5, 2007 and its debt has a term of five years from that date.
Tenon is the business left over once Fletcher Forests sold its forests. It owns a mill in Taupo and reports its accounts in US dollars.
Its operating profit of $US3 million in the six months to December 31 was down from $US6 million last year.
