Timbercorp expecting strong full year result

Australian agribusiness investor Timbercorp Ltd is expecting a strong result this year, with first half sales tracking well ahead of the previous corresponding period.

Timbercorp today announced a net profit of A$7.65 million ($8.23 million) for the six months to March 31, 2005.

Timbercorp chief executive Robert Hance said the company was benefiting from the early sell out of its 2005 fruit projects.

"Sales are tracking well ahead of this time last year leading to an early sell out of our 2005 almond, table grape and mango projects," he said.

"Our citrus project, due to be released next Monday and our Timberlot project are also expected to close early, heavily oversubscribed.

"We are, therefore, expecting another strong full year result in 2005."

Timbercorp is expecting the majority of new project sales to be generated in the second half this year, as in prior years.

The company's project sales for 2005 stand at A$90 million, including A$6.6 million in new project sales for the six months to March.

Timbercorp said the planned expansion of its orchard trust would result in additional income streams and reduced capital spending.

"As recently announced, the Timbercorp Orchard Trust has further plans for expansion in the short-term," the company said.

"The ability to lease agricultural assets from the Orchard Trust reduces capital spending requirements and the development and management of those assets results in additional income streams."

Timbercorp's first half net profit represents a 36 per cent increase on the previous corresponding period.

Timbercorp said the result had been boosted by strong revenue from the company's fruit, almond and eucalypt projects.

"Annuity style revenue from Timbercorp's existing eucalypt, citrus, table grape, olive and almond projects continued a strong growth pattern, achieving an increase of 45 per cent to A$56.4 million," the company said.

"This resulted in a A$20.5 million EBIT (earnings before interest and tax) contribution compared to A$16.4 million for the previous period."

Timbercorp's cash position stood at A$53.2 million on March 31, 2005.

"This was despite net investment spending during the period of A$100.5 million, which included acquisition of forestry land required for the 2004 and 2005 projects, further development of the Albany Port facility and spending on horticultural land, infrastructure and permanent water rights," the company said.

Timbercorp said an interim dividend will be announced by July 1, 2005, when the full extent of new project sales is known.

- AAP