Fletcher Forests returns to profit

9.25am

Fletcher Forests today announced a return to net profit, albeit just $4 million for the six months to December 31, against a $302 million loss a year ago.

The company announced operating earnings before unusual items of $47 million compared with $28 million.

Net profit after tax, before unusual items, was $20 million, an increase of $1 million over the corresponding period.

Unusual items for the period were a loss of $16 million (after tax), associated primarily with the proposed sale of cutting rights announced in January 2003,

The loss in the prior period included a net unusual loss of $321 million relating predominantly to a write-off of the company's subordinated loan to the Central North Island Forest Partnership (CNI).

No dividend was announced.

Operating revenue increased 11 per cent to $359 million with operating earnings from the North American business up 55 per cent to $17 million.

Operating earnings included an unrealised foreign exchange gain of $12 million, compared to $1 million in the corresponding period.

The company said foreign exchange hedging arrangements mitigated the effect of the strengthening New Zealand dollar on operating earnings.

The forest crop valuation this period was negative $3 million compared to an increase of $17 million in the corresponding period, reflecting the effect of recent lower average log prices.

Net tangible assets per share were estimated to have risen to $2.05, from $1.96 at December 31, 2001. Fletcher Forest shares were up 1 cent to $1.15 shortly after the result announcement.

Earnings per share were 0.7 cents compared with a loss of 54.1 cents.

- NZPA