TFS benefits from expansion

Nedlands-based TFS Corporation has achieved a record full-year profit of $82.5 million, up 48 per cent on the back of increased plantation asset ownership.

The sandalwood producer announced its direct ownership of plantations had increased by 52 per cent to 3,167 hectares, which drove revenue up 13 per cent to $212.2 million, along with a 47 per cent increase in plantation costs.

In July, TFS announced it had purchased an established 364ha Indian sandalwood plantation for $35 million.

It followed a $67 million capital raising in May, which signalled that the company planned to increase the scale of its plantations.

“The record financial results are evidence of the significant progress we have made across all areas of the business,” TFS chief executive officer Frank Wilson said.

“TFS is confident that shareholders and investors will continue to benefit from recent successes such as the landmark deal to supply pharmaceutical grade oil to Galderma at $US4,500 ($A4,815) per kilogram.

“While Galderma has the potential to consume a large proportion of TFS’s future oil, we also expect strong demand from core end markets in China, India and Europe for a range of natural and sustainable wood and oil products.” 

The company had a gearing ratio of 13.2 per cent, down from 24.9 per cent, and declared a final dividend of 3 cents per share, fully franked, in line with its payout in the last financial year.

TFS shares were down 0.75 per cent to $1.98 per share at 10am.