Sustainable Forest 2010 profit up 24.9% to HK$341.5mn

Group’s revenue from continuing operations surged 229% behind its 20 fold increase in sales of its forestry and timber products business.

Sustainable Forest Holdings Limited (“SFH”) announced its annual results for the year ended 31 March 2011.

During the year under review, the Group’s revenue from continuing operations surged 229% to approximately HK$866.7 million, (2009/10: HK$263.1 million), attributable to the significant increment in sales of forestry and timber products. The Group’s gross profit margin for the full year ended 31 March 2011 was 58%, improving from 45% the year before.

Net profit after tax for the year under review increased 24.9% to HK$341.5 million (2009/10: HK$274.3 million). Basic earnings per share from continuing operations were approximately HK10.3 cents (2009/10: HK21.37 cents). The Board of Directors recommends the payment of a final dividend of HK0.4 cents per ordinary share and HK0.084 cents per convertible preference share for the year ended 31 March 2011 (2009/10: Nil).

Ms Sandy Fletcher, Chief Financial Officer of Sustainable Forest Holdings Limited, said, “We are very pleased by our remarkable growth and satisfactory results delivered during the year under review. It is our goal to achieve immediate profitability and maintain its high growth through forestry operations which we were able to deliver satisfactory results and significant progress in the past year. We are especially pleased to become a dividend paying company in less than two years after the Group’s transformation into a forestry company in July 2009.”

Fletcher said the company expects demand for the Group’s forestry and timber products in the short and long term to remain strong especially in China due to urbanization of the population and rising wealth, according to a Sustainable Forest report.

“The acquisition of New Oasis and the establishment of the wholesale timber exchange in Zhongshan will allow the Group to strengthen its presence in China and collect better market intelligence in the country” Fletcher said 

The Group will also begin its sustainably managed forest operations in its self-owned Acre forest in Brazil in July 2011. With the expanded supply network to include Africa and the United States, the company is able to provide a larger range of product offerings directly to our customers such as furniture, flooring, doors and other timber products manufacturers particularly in China. 

“By going direct to users of our products skipping several middlemen allows our customers to achieve costs savings and provides us with satisfactory gross profit margin from the trading business.”

Fletcher was optimistic on the company’s growth despite some setbacks. 

“We managed to accomplish significant milestones in the past year by keeping focus on our goal to become a truly integrated one-stop timber products group carrying out sustainable forest management and fully integrate its harvesting, processing, manufacturing and distribution operations. No doubt there will be more challenges in the future but we are positive about the Group’s prospects going forward,” she said.