FORESTRY Tasmania blames reduced logging zones, a high Australian dollar and a lack of access to export facilities for tripling its losses, but says it still has a "very important job to do".
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The state-owned forest manager recorded a loss of $43.1 million for the 2013-14 financial year, compared with a $14 million loss the previous year.
Resources Minister Paul Harriss said the bleak result was due to the former government's forest peace deal, which set aside 400,000 hectares of forest for protection.
The Liberals' forest policy became law in August, and will unlock protected forests to logging in six years' time.
Mr Harriss said the move would "future proof" the industry, and he was optimistic Forestry Tasmania would become profitable.
The loss is despite the company increasing quality saw log sales by six per cent, pulp wood sales by 43 per cent and a big jump in revenue from $56.3 million to $95.8 million.
"We are confident with building a new framework for the business to grow," Mr Harriss said.
Forestry Tasmania chairman Bob Annells and chief executive Steve Whiteley said the disappointing result was due to a $19-million reduction in the valuation of the production forest available to the company.
They blamed the high Australian dollar and restricted access to "critical processing and export sites", including chip mills and port facilities in the South and North-West of the state.
"Despite its current financial difficulties, Forestry Tasmania continues to have a very important job to do on behalf on all Tasmanians," the report said.
The company received $37 million from the former government in an effort to reduce borrowings.
The focus of the company this financial year will be investigating cost-effective solutions for timber residue in the South of the state.
Opposition Leader Bryan Green said the government had not offered "a single extra stick for the forest industry".
"They've changed no volumes, they've given Forestry Tasmania no extra land area," Mr Green said.
Greens forestry spokesman Kim Booth said the loss proved the company needed to move to a full-cost recovery model.
"To keep losing money, despite producing more timber and receiving handouts from the public purse is totally insane and proves that the company is not charging enough and producing a product the market does not want," Mr Booth said.
Forestry Tasmania is being reviewed by Mr Harriss and Treasurer Peter Gutwein to transition it to a financially stable model.
The council advising Mr Harriss on the forest industry met for the first time last week, and will continue to investigate residue solutions.
