Australia's Elders sells surplus timberland in Queensland for AU$19M, plans to divest all forestry assets, reinvest in other business operations
October 4, 2011
– Australia's forest products company Elders Ltd. said it sold surplus timberland in Queensland for AU$19 million (US$17.9 million) and is close to selling more forestry properties as part of a plan to sell off all its forestry assets, The Canberra Times reported Oct. 4.
Elders said it would use the profits to pay down debt and reinvest in other business operations, said Malcolm Jackman, managing director.
The agribusiness company said it will take up to AU$53 million in debt write-down over the change in forestry land values and sale of its 50% share in a grain-trading joint venture, The Canberra Times reported.
The Adelaide-based company cited weak demand for wood fiber and low prices as triggering the offloading. Shares in the company have fallen more than 23% over the last four weeks and in May, Elders reported a first-half loss of AU$14.6 million, with losses partly caused by decreased forestry income.
Retention of the company's 17,000 hectares (42,000 acres) of forestry assets no longer provided adequate value for shareholders, said Jackman.
Other factors that depressed forest products sales included weak demand following Japan's tsunami, ongoing negotiations over woodchip prices with Japanese buyers, high exchange rates, and cyclone damage to company assets in Queensland.
Elders has 3,390 employees involved in businesses that include hardwood plantations and timber processing under Elders Forestry, and in its automotive supply and rural services businesses, according to the company website.
The primary source of this article is The Canberra Times, Canberra, Australia, on Oct. 4, 2011.