Forest revaluations save Tenon’s US$8M FY earnings guidance

Forest revaluations save Tenon’s US$8M annual earnings guidance

By Pattrick Smellie

July 22 (BusinessDesk) – NZX-listed American timber products manufacturer Tenon Ltd. expects its earnings to halve to US$2 million in the second half of the financial year to June 30, with previous guidance only preserved by New Zealand forest revaluations.

Tenon cited “the negative impact of rising fuel prices and severe storms” in the American spring months of April and May, traditionally a period of high sales for home building and renovations, in issuing new guidance late today.

The company is keeping full years earning advice at US$8 million, in line with guidance at the half year, where “flat” earnings were predicted after declaring $4 million first-half earnings.

“This result will include approximately US$2 million from the positive revaluation of its forest assets as required under IFRS,” Tenon said in a statement. The forests represented a hedge for Tenon against the rise in log prices caused by strong Chinese demand.

Tenon shares were down 4.7% when trading closed on the NZX today, at 41 NZ cents, and have slumped 29% this year.

(BusinessDesk)

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