Further progress towards financial sustainability, 25 October 2016

Further progress towards financial sustainability

Forestry Tasmania today released its Annual Report which provides a summary of its performance against its corporate objectives, including its financial performance, for the 2015/16 financial year. The report was tabled in Parliament today and is available on Forestry Tasmania’s website.

“We are pleased to report that Forestry Tasmania has improved its underlying financial performance over the past financial year while also increasing our total production of wood products, including a 7,000 m3 increase in high quality sawlogs supplied to Tasmanian sawmillers,” said Mr Rob de Fégely, Chairman of Forestry Tasmania’s Board. 

“This improvement in wood production and financial performance was achieved despite disruptions caused by extensive bushfires and major flood damage and, very importantly, it was achieved safely – with only one Lost Time Injury compared to ten the previous year – our best ever safety performance.

“We thank our customers, contractors, staff and other stakeholders for working constructively with us during this challenging period.”

The report details significant financial improvements including a $4.2 million increase in domestic and export revenue and $9.7 million in cost reductions. 

“Unfortunately these improvements are obscured by two very large accounting revaluations relating to our RBF defined benefit superannuation liability and the value of our forest.

“While these accounting revaluations have little relationship with our operating performance, they make a $106 million adverse impact on our reported total comprehensive result – if these revaluations are excluded, Forestry Tasmania’s income improved by over $8 million.

“We recognise that there is still further work to be done to achieve financial sustainability, but the results for the year show that the business is moving in the right direction.

“We’re continuing to focus on reducing costs and increasing revenue – including by negotiating increased prices with our sawlog customers.

“We’re also focusing on our core business – which includes seeking to sell Tahune AirWalk to a private operator – and working with the Government to implement southern residue solutions and prepare for a sale of hardwood plantations.

“In addition, we’re continuing to work towards FSC certification, and are making good progress in responding to the issues identified by the auditors in their initial report – including ceasing clearfelling of coupes containing more than 25% mapped old growth, and providing increased protection for swift parrot habitat.

“Implementing a new financially sustainable operating model for Forestry Tasmania will be our key focus over the next few months, and therefore we look forward to the Government’s announcements on this matter.”

Tuesday, 25 October 2016