Exports bolster forestry returns

By LIBBY MIDDLEBROOK

Robust demand for logs and an increase in harvest boosted baby forestry company Evergreen Forests' balance sheet by more than $2 million for the six months ended December 31, 1999.

Floated in 1993, the Auckland-based company had operating profits of $2.1 million for the six-month period, up 137 per cent compared to the same period in 1998, which recorded profits of $890,000.

Chief executive Mark Bogle said the stronger performance was thanks to improved export log prices in Asia and higher demand in domestic and Australian markets.

Evergreen, which owns forestry blocks in the northern and central North Island, has been harvesting trees for about 12 months.

"We're very pleased with the result. It shows we can operate profitably in a difficult trading environment.

"Now we're starting to see commodity prices strengthening further as the Asian economic cycle improves," said Mr Bogle.

Sales rose 152 per cent from $2.3 million in 1998 to $5.8 million in the six months to December 31, 1999. Earnings per share rose 135 per cent, from 0.68c in 1998 to 1.6c in the last two quarters. Borrowings increased from zero in 1998 to $16.9 million in the six months to December, 1999, which was partly used to buy two Gisborne forests from competitor Carter Holt Harvey for $21 million.

Meanwhile, Evergreen yesterday announced a new joint-venture company - Forestry New Zealand - with former Rayonier manager Peter Berg and former Wenita Forests Products manager Peter Hill.

The company, 70 per cent owned by Evergreen, will market and sell New Zealand forestry products worldwide.