Forestry Tasmania posts $12m loss

ABC News (Australian Broadcasting Corporation), August 29, 2011

Forestry Tasmania has blamed a raft of issues on an operating loss of over $12 million last financial year.

The state-owned company says it has faced a long list of problems, including the decision of its largest customer, Gunns, to get out of native forest harvesting and close woodchip mills.

Chairman Adrian Kloeden has described last financial year as a tough one, both financially and politically.

"The Statement of Principles negotiations, the ongoing effects of the global financial crisis, the high Australian dollar and the Japanese earthquake and tsunami of March this year; of these issues the closure of the Triabunna woodchip mill had one of the most detrimental effects on our year end trading results."

The company has moved to significantly reduce operating costs, including reducing its workforce from 400 to 350 full-time equivalents.

Uncertainty caused by the forests peace deal has forced a write down in the value of its forests.

Mr Kloeden says the forests are now worth $90 million less than the previous financial year.

"[It's a] 30 per cent reduction in the value of the forest estate," he said.

FT says it holds out little hope of Gunns' Triabunna mill reopening.

This year's result was a slight improvement on its previous result which has been revised to a $12.2 million deficit due to a change in the way the company must report.

FT will not be able to return a dividend to the Government this year.

Resources Minister Bryan Green says the Government is not surprised.

"Contractors have been going broke through that period, that's why the governments have had to step in and assist the industry and this is a further reflection," he said.

"That's why the Government has embarked on a process of restructuring the forest industry so as to ensure that we put it on a sustainable footing going forward."