Record year expected for Ernslaw One owners
Wednesday 8 Nov 2017
Net profit fell to $41 million in the year ended June 30 from $95 million a year earlier, but managing director Thomas Song said that masks the underlying performance of the company. That's because income in 2016 was boosted by a $124 million gain on the value of its forests, while the latest year had only three months of consolidated revenue from New Zealand King Salmon prior to the fish farmer's initial public offering in October 2016.
"2018 will be a record year as all forestry commodities have had a price upswing," Song said. "Land development will also assist with the expected completion of apartment building."
Oregon's 2017 results also don't include any biological gain on salmon stock in the water as King Salmon ceased being a subsidiary, having contributed a $30 million gain in 2016. The company's revenue in the latest year fell to $479 million from $532 million, while other operating income, which includes forestry revaluations, dropped to $21.7 million from about $180 million.
The breakdown of revenue was $343 million from forestry, $97 million from land development, a three-month contribution of $28 million from King Salmon and $11 million from plastic and brushware manufacturing, Song said in an email. Excluding a land purchase of about $33 million operating cash flow was about $3 million ahead of 2016.
The company's 100,000-hectare forest estate was valued at $774 million at June 30 from $781 million a year earlier, accounting for more than half Oregon's $1.41 billion of total assets. Oregon's $88 million of carbon credits were valued at $17.20 per unit at the balance date, up from $84.2 million at $17.85/unit price a year earlier.
It held $134 million of land for development, up from $120.6 million a year earlier. No assets were held for sale.
Oregon tends to fly under the radar but it owns a range of high-profile businesses in New Zealand including the country's fourth-biggest forest estate, Ernslaw One and its subsidiary Winstone Pulp International, 40.2 percent of King Salmon, Innova Products - better known for its ClickClack kitchen storage products, and property development company The Neil Group.
It also owns 50 percent of a joint venture Edible Forest Fungi NZ, 29 percent of NZ Marine Hatcheries, which isn't currently trading, and 100 percent of Talus Industries NZ, a brush making and plastic moulding company that Oregon is winding up "because of ongoing losses". Notes to its accounts say most of the staff at Talus were made redundant in August and the sale of assets was expected to exceed the carrying value of the business.
Neil Group sold its Lauriston Park Retirement Village, held under the Neil Group umbrella, for cash and shares to NZX-listed retirement village operator Arvida Group. As at balance date the shares were worth about $6 million. Its accounts show proceeds of $5.4 million from investments and $16.3 million from the sale of unlisted securities.
Pictured: John Hollows with crayfish established in Ernslaw One forests
Source: BusinessDesk via Scoop
Copyright 2004-2017 © Innovatek Ltd. All rights reserved.