Agribusiness company forecasts sales slump
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Forest Enterprises Australia (FEA) expects its sales for 2009 to drop by more than $50 million this year as a result of “factors beyond the control of the company”.
The company forecasts that sales will be significantly less than the $60 million achieved in 2006 and 2007, according to a statement. FEA achieved $114.5 million in sales in 2008.
However, the company expects increased revenue from its timber sales and plantation establishment compared to the previous year.
Last month FEA sent a release reassuring investors about the health of the company in response to concerns over the collapse of Timbercorp and Great Southern.
The agribusiness company recently sold a portion of its loan book for $13 million in an effort to reduce its debt, according to a letter sent to shareholders last month. Approximately $190 million of its $270 million in loans has been repaid or sold off.
FEA had net debt of $197 million at the end of 2008, which is due at the end of 2011.
Approximately 50 per cent of FEA’s revenues came from sales of forestry investments last financial year.
Chief executive Andrew White said the company was able to demonstrate quality returns and growth from its earlier forestry investment projects.
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