New Zealand Wool Services International (WSI) has recorded a group net profit after tax of $1.801 million for the six months to December 31.
While that was lower than the record result of $3.058 million in the corresponding period for 2010, it was ahead of budget and the second strongest first half-year in the company's history.
The board was "particularly pleased" with the result in light of the exceptional conditions that prevailed in the previous year, which did not continue into the first half of the current financial year, the company said in a statement.
Group revenue was $107.564 million, compared with $84.801 million achieved for the 2010 half-year, driven by increased values but declining volumes.
Although the dollar turnover for the period was higher than last year, weakness resurfaced in the world economy, particularly in Europe and, as a consequence, wool trading declined in volume in the latter part of the period.
The company traditionally performed more strongly in the second half of its financial year and believed the six months to June 2012 should produce "a satisfactory year-end result".
However, the company remained cautious, because of the vagaries of the international market. In addition, the current level of the New Zealand dollar was making the exporting of all New Zealand products more difficult and less profitable.
A declining wool clip, the deteriorating world economy and the high dollar posed difficulties beyond its control and, for those reasons, the company had invested in new research that it believed would have a positive impact during the next financial year and longer term.
The board has resolved to pay shareholders an interim imputed dividend of 1.5 cents per share.
The future of WSI has been under a cloud, after the Commerce Commission granted authorisation to Cavalier Wool Holdings in June last year to make an offer for WSI's wool-scouring assets. The commission's decision was appealed by carpet manufacturer Godfrey Hirst.
A joint venture between Wool Equities Ltd and boutique investment bank Ocean Partners was then announced but it failed to raise enough capital in its attempt to acquire WSI.
WSI confirmed it was planning capital raising in its attempt to buy the 64% of the company that is owned by Plum Duff and Woolpak Holdings and is under the control of a receiver, and then the High Court dismissed Godfrey Hirst's appeal.
