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Cayman Islands-owned Mangakahia Forest lists harvest by 60 percent , sales up 35 percent

Tuesday 28th May 2013

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Greenheart NZ Forestry, the Northland forester whose ultimate owner shifted from failed Sino-Forest Corp to a Cayman Islands based company this year, has lifted its annual harvest by 60 percent and sales by 35 percent, its 2012 accounts show.

Greenheart operates the 13,000 hectare Mangakahia Forest, which it acquired from former parent Sino-Forest in 2011 for US$73 million in shares and debt. It was among assets transferred from Sino-Forest to Cayman Islands incorporated Emerald Plantation Holdings as part of a Canadian deal with Sino-Forest's creditors in January.

Greenheart NZ's accounts show the group harvested about 558,550 cubic metres of wood in calendar 2012, up from 348,620 cu m in 2011. Total revenue climbed 35 percent to US$37.7 million, of which about US$34 million was in export sales.

Operating costs rose to US$34.2 million from US$23.6 million, of which the bulk was harvest and distribution costs. Net profit fell to US$977,000 from US$2.46 million a year earlier, once one-time accounting adjustments and interest costs are included.

Interest-bearing debt of about US$57 million included a US$40 million loan from former immediate parent Mega Harvest International

Sino-Forest filed for bankruptcy protection in Canada in March last year. Under a plan agreed by its creditors, its assets were transferred to Emerald, owned by the creditors. The transfer included 66.6 percent of Hong Kong-listed Greenheart Group, triggering a requirement for Emerald to make an offer for the remaining shares, which it did this year.

The Toronto Stock Exchange listed shares of Sino Forest tumbled in June 2011 after short-seller Carson Block of Muddy Waters Research alleged the company had been inflating its assets and earnings. The shares were subsequently suspended from trading by the Ontario Securities Commission.

Shareholders of Sino-Forest had included Richard Chandler Corp, the investment vehicle of kiwi-born investors Richard Chandler.

New Zealand's total exports of logs and wood fell 1.2 percent to $3.16 billion in calendar2012, according to government figures.

BusinessDesk.co.nz



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