TFS delivers solid result

Shares in sandalwood producer TFS Corporation were up nearly 25 per cent today after the company announced an increase in profit, but declared no interim dividend.

TFS reported a 23 per cent rise in half-year net profit to $67.4 million, helped by higher product sales and a jump in fees for plantations sold.

However, revenue was down 6.1 per cent to $150.6 million compared with the previous corresponding period.

The revenue result was impacted by the lower exchange rate.

Earnings before interest, tax, depreciation and amortisation was up 15.6 per cent to $107 million.

No interim dividend was declared.

“We have had a strong start to the year and we are extremely well placed to meet the milestones set for 2016 under our growth strategy,” TFS managing director Frank Wilson said.

“In the six months we have delivered a good financial result and we are in a stronger position than this time last year.

“We have also added significant scale to our operations, including a second seedling nursery in Katherine to support 1,500 hectares of new plantings in 2016 and a second production line to our Kununurra processing facility ahead of our first major harvest.”

TFS also announced to today it had signed new multi-year agreements to supply its wood to buyers in China and India.

“With our existing contracts with Galderma and Lush Cosmetics, I am very pleased to announce that we have now forward sold all of the TFS owned yield from the forthcoming two harvests,” Mr Wilson said.

 TFS reaffirmed its EBITDA guidance for FY16 to be 5-10 per cent better than its FY15 result.

TFS was 23.6 per cent higher to $1.65 each at the close of trade.