TFS set for solid year

Sandalwood producer TFS Corporation has reaffirmed its earnings guidance for FY16 after finalising the $29 million sale of plantations to a US-based investor.

Nedlands-based TFS expects earnings before interest, tax, depreciation and amortisation to improve by between 5 and 10 per cent for FY16, following completion of its annual sales season.

Managing director Frank Wilson said the company achieved its operational and financial targets set 12 months ago.

“We enter the new financial year with positive momentum and we are well advanced with our plans to deliver a significant increase in TFS’s financial performance in FY17,” he said.

TFS expects to have planted about 1,600 hectares of new plantations in the Northern Territory and Queensland by the end of the month.

The group also announced it had received $29 million in cash from the sale of new plantations and land to an unnamed US-based global investment management firm, and was also offering growers to buy back their interests in its ‘TFS2002 project’, due to be harvested next year.

It follows news late last month that TFS had signed agreements to sell a $24 million portfolio of loans and receivables to undisclosed investors, with $10 million in cash already received and the balance expected to be settled this month.

 The company also established two funding programs with Australian-based financiers, which will give TFS the option to divest loans written in future plantation sales seasons.

TFS shares were 4 per cent lower to $1.42 each at the close of trade.