Sino-Forest Corp - News Release
Sino-Forest three-month results
Sino-Forest Corp TRE.A
Shares issued 65,892,900 May 17 close $1.50
Tue 18 May 99 News Release
Mr. Allen Chan reports
Net income for the first quarter ended March 31, 1999, was $2.9-million, an
increase of 32 per cent, compared with net income of $2.2-million for the
first quarter ended March 31, 1998. Revenue of $17.1-million recorded in
the first quarter of 1999 was 94 per cent higher than the $8.8-million in
the first quarter of 1998. The increase in both revenue and earnings is
primarily due to the higher lumber and wood product trading and increase in
principal sales.
Wood Chip Shipments
For the quarter ended March 31, 1999, wood chip shipments increased 27 per
cent to 210,000 BDMT, compared with 166,000 BDMT in the first quarter of
1998. Of the total wood chips shipped in the first quarter of 1999, 19,000
BDMT, representing approximately 9 per cent, were for the export market and
191,000 BDMT, representing approximately 91 per cent, were sold in the
domestic PRC market. Export and domestic PRC shipments in the first quarter
of 1998 were 32,000 BDMT and 134,000 BDMT respectively. For the first
quarter of 1999, the company acted as principal on 84,000 BDMT and as an
agent on 126,000 BDMT, compared with 79,000 BDMT and 87,000 BDMT
respectively for the first quarter of 1998. As in the past, the first
quarter shipment of the company typically represents approximately 10 per
cent of the total shipment for the year. The company believes that it is on
track to produce at least 2.0 million BDMT of wood chips in 1999.
During the first quarter of 1999, commission income earned from wood chip
shipments of 126,000 BDMT made by the company's Guangxi joint venture
partner amounted to approximately $1.8-million, compared with $1.3-million
earned in the first quarter of 1998. Agency sales are expected to be
reduced further in 1999 with principal sales expected to make up
approximately 60 per cent of total shipments in 1999, compared with the 41
per cent attained in fiscal 1998.
The average wood chip price, net of VAT, in the first quarter of 1999 has
decreased slightly to $98 per BDMT, compared with $100 per BDMT in the last
three quarters of fiscal 1998. With respect to sales in which the company
acted as an agent, the company earned an average of $14.62 per BDMT in the
first quarter of 1999, compared with $15.15 per BDMT attained in 1998. The
decrease in both wood chip price and commission income earned per BDMT in
the first quarter of 1999 is attributable to the continuing weak Japanese
market, which has also affected prices in the domestic market slightly.
Despite the weaker prices recorded in the first quarter of 1999, the
company believes that current positive developments in the pulp market will
strengthen prices in the second half of 1999.
Lumber and Wood Products Trading
Revenue from lumber and wood product trading increased 1,033 per cent to
$7.1-million in the first quarter of 1999, compared with $0.6-million in
the first quarter of 1998. "With the proceeds from the financing completed
in January 1999, the lumber and wood product trading business is expected
to increase significantly," says Allen Chan, chairman and chief executive
officer. "We expect to realize this increase in lumber and wood trading
business over the next three quarters of 1999," says Mr. Chan. Revenue from
the lumber and wood product trading business is expected to be
approximately $80.0-million in 1999, compared with $11.7-million in 1998.
CONSOLIDATED STATEMENT OF INCOME
Three months ended March 31
(thousands of U.S. dollars)
1999 1998
Revenue $ 17,138 $ 8,758
-------- --------
Costs and expenses
Cost of sales 12,752 5,218
Selling, general
and administration 977 1,127
Depreciation and
amortization 15 15
Amortization of
deferred financing
costs 4 -
-------- --------
13,748 6,360
-------- --------
Income from
operations 3,390 2,398
Equity in losses
of Jiangxi
Investments (97) (102)
Interest income
(expense), net (151) (1)
Other income 1 -
-------- --------
Income before
income taxes 3,143 2,295
Provision for
income taxes (243) (139)
-------- --------
Net income $ 2,900 $ 2,156
======== ========
Earnings per
share 4 cents 3 cents
WARNING: The company relies upon litigation protection for
"forward-looking" statements.
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