Phaunos Timber results for 2014 show the asset value falling from 78 cents to 57 cents and its share price falling from 49 cents to 37 cents. They aren’t paying a dividend.
Part of the fall in the net asset value can be attributed to the dilutive issue of 30m shares at 40 cents during the period – in an attempt to shore up their balance sheet. The biggest impact though relates to the fall in value of the timber portfolio which was written down by $90m. Of this the majority related to the assets they classify as high risk so they think the majority of the net asset value is now represented by the decent plantations that they want to keep. Foreign exchange movements knocked off $17.5m.
They have almost $15m in cash following the equity raise and are selling off surplus eucalyptus at Mata Mineira (Brazil) which should free up a further $4.6m – this is going to pulp rather than charcoal as originally anticipated as charcoal demand has fallen in line with steel production in Brazil.
The Board has cut its fees as part of a general effort to cut overheads – they reckon they’ve taken $4m per annum out but they think they can do more. For instance, they are transferring all the back office functions from Boston to London and think this will save $500,000 per annum.
PTF : Phaunos pares back NAV to core