GUNNS Ltd critics yesterday attacked the Tasmanian company's $4.6 million half- yearly loss as number juggling to hide its real financial woes.
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But Gunns managing director Greg L'Estrange said that the figures released to the Australian Securities Exchange in its half-yearly report were on target to enable the timber company to build its proposed $2.3 billion Bell Bay pulp mill.
The ASX report revealed that the $4.6 million net loss after tax for the half-year ended December 31, 2010, was affected by restructuring costs totalling more than $30 million associated with Gunns' ongoing sale of assets and businesses.
But Mr L'Estrange said that the asset sales would continue with Gunns sticking to the strategic plan outlined last year of "removing assets intensity".
He confirmed that the company was close to clinching a deal on the sale of its "green triangle" Victorian and South Australian plantations.
The sale and lease-back of Tasmanian plantations would come later, he said.
Tasmanian Greens forestry spokesman Kim Booth said that Gunns' half-yearly report was "smoke and mirrors" to hide a real net loss of about $23.4 million.
He said that purchase figures of the former Forest Enterprise Australia Bell Bay mill had been juggled to inflate the company's earnings.
But Mr L'Estrange said that Gunns had recorded a gain on the purchase of the mill of $18.8 million.
The company had hoped that the relative value of the Australian dollar against the US dollar might have backed off so that its export prices were more competitive.
But the underlying earnings before tax for the half- year increased to $20.2 million, up $12.7 million on the previous six months.
Group revenue for the six months was $363.4 million, up 11 per cent on the previous period.
Mr L'Estrange agreed that this was a reflection of the company's significant divestment of assets in the last half of 2010.
One of the biggest financial challenges for Gunns will come at this time next year when its senior debt facilities will be due for renewal.
The company made the first of its expected $10 million quarterly repayments last December.
It hopes that by January 2012, its required debt facilities will have reduced significantly as a result of the asset sale program started last year.
In other expenses for the company in the six months to December 31, Gunns:
Paid $14,316,855 in employee redundancies, compared with nil for the previous six months.
(This was the time when a number of senior directors, including former managing director John Gay and Robin Gray, left the company.)
Experienced inventory write-downs of $8,938,956 related to the closure of the West Australian jarrah hardwood and the Tasmanian Scottsdale softwood sawmills, compared with nil in the previous six months.