31st Jan 2014 10:53
LONDON (Alliance News) - Cambium Global Timberland Ltd Friday saw a negative total return of 18.9% in the half-year ended October 31 as its portfolio was hit by foreign exchange losses due to the strengthening sterling, as well as write-downs of its assets.
Cambium invests in forestry based properties in the US, Brazil, Hawaii and Australia.
Cambium's net asset value as at October 31 was 48 pence per share, down from 59 pence per share at April 30. This was mostly due to currency movements, Cambium said, which it said accounted for 17% of the change, alongside changes to the valuation of its timbre assets.
The closed-ended investment company saw revenue of GBP74,002, more than halved from GBP212,337 in the previous year. This was mainly due to lower revenue from sales of harvested timber and stumpage, which declined to GBP7,014 from GBP152,435.
The company saw declines in Australia as it wrote down the valuation of timbre located on its property there. In the US, timbre and land prices improved, but its assets in Hawaii were hit by lower forecast revenue and higher forecast harvesting and haul costs, it said. In Brazil the company was positively benefited by higher land and timbre values. However, all of the company's property valuations were hit by foreign exchange movements due to the strengthening of sterling.
Cambium said that emerging market economies like Brazil are facing a number of challenges, although economic conditions appeared to be improving in the US.
The company said it was investigating and analysing its interest in the 3R Tocantins property in Brazil. As a result the company has made a provision on 3R of GBP1,950,948. This investigation is ongoing, Cambium said, and would assess how the situation requiring the need for the provision arose, and how it can be remedied.
As a result of lower revenue and this provision, Cambium saw a pretax loss of GBP6.1 million, widened from a pretax loss of GBP3.9 million in the previous year.
Shares in Cambium were trading down 3.5% at 27.50 pence Friday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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