Annual Report 2007

Managing Director Bob Gordon said today that FT’s purchase of John Holland Ltd’s 50% share in Newood Holdings, the company that operates the Huon and Circular Head Wood Centres, will deliver improved profitability and returns to the community.

Commenting on the release of FT’s 2007 annual report, Mr Gordon said that the purchase will provide substantial economic benefits for the Tasmanian community, through increased dividends and taxes. The Wood Centres will also continue to create jobs in regional areas.

The purchase arrangements commenced during the 2006-07 financial year, and FT assumed 100% control effective from 1st July 2007.

“The change in ownership reflects the growth of the project from the development to the operational stage. Forestry Tasmania has a strong interest in the operational stage, because the Newood ventures represent significant advances in the value added component of timber processing in Tasmania.”

Mr Gordon said that FT had delivered strong results in many areas during 2006-07, despite a difficult trading year.

“FT’s Earnings Before Interest and Tax (EBIT) result for 2007 was $21.898 million, which compares to $19.887 million in 2006. Our return on assets was up from 2.27% in 2006 to 2.42% in 2007.

“Our 2007 profit was once again affected by the volatility in international eucalypt woodchip exports. However, the proposed wood supply agreement with Gunns Ltd for the pulp mill promises to safeguard FT from future market downturns. It will deliver a further $15-$20 million to FT’s profit over the long term.

“The opening of Ta Ann Tasmania’s Huon rotary veneer mill is also delivering increased security in our pulpwood sales.

“This mill is now processing regrowth eucalypt timber, which may otherwise be exported as woodchips, into value-added veneers. Significantly, it has also created 60 new jobs for the people of the Huon Valley.”

Mr Gordon said that FT’s trading year was also marked by the end of conversion of native forests to plantations.

“This was a difficult decision, as plantations are far more efficient in economic terms than native forests.

“However, in environmental terms, native forests provide many more benefits. We harvest and re-grow native forests using techniques that are similar to natural processes. These regrowth forests store carbon over several generations and contain many biodiversity values.

“As a manager of public forests, our performance should not be judged solely on financial profit.

“We manage State forests to deliver 300,000 cubic metres of high quality sawlogs and veneer logs each year. We manage native forests over 90-year timeframes to ensure that we can sustainably deliver this outcome.

“We are also required to provide a range of community service obligations, such as conservation and recreational opportunities. These are funded through the sales of wood products, and not by external sources.”

ENDS
24th October 2007


Stewards of the Forest [3281KB]


Forestry Tasmania Annual Report 2006/07 [3722KB]





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