Evergreen Announces Interim Result

Evergreen Announces Interim Result

Evergreen Forests Limited announced today it incurred a net loss after tax of $13.151 million for the six months ended December 2003 (December 2002 profit $4.270m). The loss incorporates the forest value write-down ($13.162m post tax) announced in December 2003. The introduction of valuation accounting on June 30 2003 means that the prior period result cannot be directly compared to this period. The previous accounting policy (historical cost) required the capitalisation of some interest and silviculture expenses which are now expensed under valuation accounting.

Evergreens Chairman, Mr Peter Wilson, said that escalating shipping costs and the strong currency had further impacted on forest values. While the company had previously warned of the consequences of these difficult trading conditions the scale of the value adjustment was material. The June 2003 forest value write-down and the further write-down in December 2003 placed additional importance on the strategic review outlined at the October 2003 Annual Meeting.

The review recommendations are currently being considered by the Board and decisions arising from that will be communicated to shareholders. Mr Wilson said he expected a future strategy to address cost rationalisation and additional measures to prudently manage the consequences of higher debt ratios.

Chief Executive, Mr Mark Bogle, said that harvest volumes of 115,279m3 were 28% lower than the previous corresponding period (160,270m3). However, he indicated that the company had increased production late last year and is expecting to harvest a higher volume of timber in the second six month period.

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