ForestrySA’s financial performance benefited from the strong housing construction recovery and strong international pulp markets with increased sales and profits across most products. Trading activities for the year were better than expected with the flow-on effect of the First Home Owners Grant enabling the Corporation to post a strong result.

Direct comparison of revenue and sales results over the past three years may be misleading as the housing industry has had to cope first with the pre-GST building rush in 1999/2000 followed by a severe slump in housing starts in 2000/2001 and then an equally strong recovery following the First Home Buyers Grant in 2001/2002. Notwithstanding this volatility, ForestrySA’s profit performance indicates an underlying growth trend over the past four years.

In 2001/2002, turnover was approximately A$111.9 million up 5.5 percent from the previous 12 months. Earnings before interest, tax and depreciation were A$35.5 million, up 8.8 percent from the previous
12 months. This result is after Community Service Obligation funding, but before tax and forest revaluation.

The total dividend and tax paid to the Government during the reporting period was A$42.7 million. This included a special dividend of A$20.0 million representing a return of retained earnings including the Fire Loss Reserve.

Business Outlook

The financial performance of ForestrySA in 2002/2003 will depend on the severity of any decline in housing construction in the coming year. Housing starts in Australia remained reasonably strong in the June 2002 quarter and construction should flow over into the September quarter delaying any reduction in demand. However, higher mortgage interest rates and the abolition of the First Home Buyers Grant is expected to reduce activity in ForestrySA’s main markets during the next financial year.

Private dwelling commencements are estimated to fall from an expected 163 000 in 2001/2002 to some 133 000 in 2002/2003 (BIS Shrapnel). However, this should be seen in the context of Australia’s long-term underlying demand of 138 000 dwellings per annum. The performance over the next 12 months will depend on how the Corporation’s customers react to construction levels scaling back to just below long-term averages.



THE SOUTH AUSTRALIAN FORESTRY CORPORATION
	Contents >> Corporate Score Card >> Executive Introduction >> Corporate Overview >> Legislation Administered by the Corporation >> Significant Achievements and Inititives >> Key Initiatives and Targets for 2002/03 >> The Corporation Structure >> SA Forestry Corporation Board >> Business Performance >> Production Activities >> Forestry Protection >> Community Service Activities >> Corporate Sustainability >> Equal Employment Opportunity Programs >> Contractual Arrangements >> Fraud >> Use of Consultants >> Freedom of Information Statement >> Charter of the SA Forestry Corporation >> Forest Statistics >> Forestry SA Reserves >> Financial Statement • FinancialPerformance for the year ended 30 June 2002 • Financial Position as at 30 June 2002 • Cash Flows for the year ended 30 June 2002 >> Notes to and forming part of the Financial Statement • 1 Role and Function of the SAFC • 2 Accounting Policies • 3 - 13b • 14 - 24 • 25 - 28 • 29 Combined Full Year Results >> Auditor General’s Report	BUSINESS PERFORMANCE

			Financial Overview ForestrySA’s financial performance benefited from the strong housing construction recovery and strong international pulp markets with increased sales and profits across most products. Trading activities for the year were better than expected with the flow-on effect of the First Home Owners Grant enabling the Corporation to post a strong result. Direct comparison of revenue and sales results over the past three years may be misleading as the housing industry has had to cope first with the pre-GST building rush in 1999/2000 followed by a severe slump in housing starts in 2000/2001 and then an equally strong recovery following the First Home Buyers Grant in 2001/2002. Notwithstanding this volatility, ForestrySA’s profit performance indicates an underlying growth trend over the past four years. In 2001/2002, turnover was approximately A$111.9 million up 5.5 percent from the previous 12 months. Earnings before interest, tax and depreciation were A$35.5 million, up 8.8 percent from the previous 12 months. This result is after Community Service Obligation funding, but before tax and forest revaluation. The total dividend and tax paid to the Government during the reporting period was A$42.7 million. This included a special dividend of A$20.0 million representing a return of retained earnings including the Fire Loss Reserve.



			Business Outlook The financial performance of ForestrySA in 2002/2003 will depend on the severity of any decline in housing construction in the coming year. Housing starts in Australia remained reasonably strong in the June 2002 quarter and construction should flow over into the September quarter delaying any reduction in demand. However, higher mortgage interest rates and the abolition of the First Home Buyers Grant is expected to reduce activity in ForestrySA’s main markets during the next financial year. Private dwelling commencements are estimated to fall from an expected 163 000 in 2001/2002 to some 133 000 in 2002/2003 (BIS Shrapnel). However, this should be seen in the context of Australia’s long-term underlying demand of 138 000 dwellings per annum. The performance over the next 12 months will depend on how the Corporation’s customers react to construction levels scaling back to just below long-term averages.