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Gunns shock profits collapse earns blast from ASX

Gunns shock profits collapse earns blast from ASX
by Steven Kiernan
Feb 24, 2010
Find more like: Gunns | shock | profits | collapse | earns | blast | from | ASX

Gunns has announced a restructure to save its Bell Bay Mill as the beleaguered forestry giant posted a staggering 98.7% fall in profits in its half-year results.

The company has also had to respond to a formal letter from the ASX for not disclosing the profits collapse before announcing its results on 22 February.

The response said that it had made a number of ASX announcements warning of the financial difficulties over the period but had not been aware of the scale until recently.

Gunns' share price has dropped around 30% since the results were published.

The figures for the period to 31 December 2009 showed that net profit after tax had fallen to $400,000 year-on-year, down 98.7% from $33.6m in the first half of the 2009 financial year.

Revenue fell 23% year-on-year from $427.6 to $325.9m.

The fall was blamed largely on the downturn in Asia and the rising Australian dollar, as well as "misinformation on environmental grounds from NGO".

Gunns said it was engaged in getting green certification for the Bell Bay mill.

"As previously announced, the mill will operate on 100% plantation fibre from the commencement of operations.

"We are also committed to that the wood supply will be Forest Stewardship Council (FSC) accredited," said the statement.

The forestry company used its results to announce a restructure to create a "investment vehicle to facilitate direct investment in our forestry assets".

The statement said the restructure would "provide a more compelling investment structure to assist in closing the financing arrangement for the Bell Bay Pulp Mill".



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