Laminates & Panels

Operating earnings for Laminates & Panels were $80 million, up 14 percent from $70 million in the prior corresponding period.

Laminex

Laminex’s operating earnings were $57 million for the six months to December, an increase of 27 percent on the underlying earnings of $45 million for the prior corresponding period.

The underlying operating earnings in the prior corresponding period were boosted by a $10 million gain on the sale of the Welshpool site in Western Australia and $5 million in savings in site closure provisions, resulting in earnings including one offs being reported as $60 million for that period.

Australian revenues were 10 percent higher driven by new product releases, new housing completions, and government stimulus in respect of new educational facilities, while conditions in the commercial sector remained relatively weak.

New Zealand revenues were in line with the prior year’s with the economy continuing to remain subdued.

Competitive pressures in Australia and New Zealand have remained strong with prices flat over the period. Resin costs increased due to general commodity price rises but this was offset by stronger Australian and New Zealand currencies.

The floods in Queensland and Victoria did not cause any structural, property or inventory damage to Laminex’s operations but the disruption to activity levels will negatively impact second half operating earnings. Supply of product to customers is not expected to be interrupted.

Formica

Operating earnings for Formica were $23 million, up 130 percent on the same period last year, while revenue was down by 6 percent largely due to adverse foreign exchange translation movements for reporting purposes.

Results for the prior corresponding period included $5 million of restructuring charges.

Volumes overall were flat, however, markets were very mixed geographically with volumes in Asia up by 15 percent on last year, North America down by 3 percent and Europe down by 8 percent.

In Asia operating earnings of $19 million were up by 12 percent on last year. Revenue in local currency terms was up by 12 percent. Performance in China was pleasing with revenue up by 15 percent, while activity levels in both Taiwan and Thailand were solid with revenues up by around 8 percent and 7 percent respectively. Across the region price and margins remained firm.

Activity levels and demand in North America were relatively flat with volume down 3 percent. Revenue in domestic currency terms was up slightly by 2 percent on the prior corresponding period due to improved customer margins and product mix. Operating earnings were up from $4 million in the prior corresponding period to $11 million, driven by logistics, warehousing and distribution initiatives, and further efficiency gains.

Europe continued to experience a difficult trading environment with revenue for the region down 8 percent in local currency terms; however, prices remained firm and market share was maintained. Operating earnings of $1 million were up by $5 million on the same period last year. The improved performance was the result of a continuation of a number of operational efficiency initiatives introduced last year coupled with the non-recurrence of restructuring costs incurred last year.

Trading conditions remained particularly tough in the United Kingdom and Spain due to the economic climate and government austerity measures. Both residential and commercial activity in these countries was down on last year and revenues in local currency terms fell by 10 percent in each market. Activity levels in the Nordic region and Continental Europe were down by a similar extent. However, strong growth was recorded in Russia and other former Soviet Union countries, and geographical expansion into Africa and India was pursued.