Auckland, New Zealand, April 13--Feltex Carpets Ltd., New Zealand's largest carpet maker, had a third-quarter loss after increased competition reduced prices, limiting its ability to pass on higher synthetic raw material costs.
The net loss in the three months ended March 31 was NZ$888,000 ($641,000), down from a profit of NZ$2.4 million a year earlier, the company said in a statement to the New Zealand stock exchange today. The company reiterated its April 1 forecast that it won't meet its February profit forecast.
Feltex, the worst performer on the nation's benchmark stock index this year, is struggling to boost prices in Australia, its largest market, as consumer confidence slows amid increased competition from imports. A further price increase for synthetic raw materials was communicated to Feltex on March 31, it said today, without giving details.
"Increasing imports and aggressive competition in Australia put pressure on the average selling price for carpets and restricted Feltex's ability to pass on higher synthetic raw material costs," the company said.
Feltex earnings were also hurt by a shortage of skilled labor which hampered its ability to complete commercial contracts, a drop in consumer confidence in Australia and increased marketing costs.
Net income in the year to June 30 will be between NZ$15 million to NZ$16 million, Feltex said, repeating its April 1 statement. On Feb. 23, the company said profit may rise to as much as NZ$24 million. Last year's profit was NZ$11 million.
