Sino-Forest reports 52% increase in 4Q net income to $170.9 million

Mar 15, 2011. /Lesprom Network/. Sino-Forest Corporation announced its financial results for the 4Q and full year ended December 31, 2010. Total revenue for the 4Q 2010 increased 63% to $767.3 million, which was mainly due to the increase in sales from wood fibre operations, as the company said in a press release received by Lesprom Network. For the full year 2010, total revenue increased 55% to $1,923.5 million, mainly attributable to an increase in sales of $447 million (up 47%) in plantation fibre and $216 million (up 91%) in trading of logs and other wood products. Gross profit increased 57% to $232.1 million for the 4Q 2010 and increased 53% to $671.5 million for the full year 2010. Gross profit margin, being gross profit expressed as a percentage of revenue, decreased 1.3% points to 30.2% in 4Q 2010, and decreased 0.7% points to 34.9% for full year 2010. As a result of the foregoing, net income for the 4Q 2010 increased 52% to $170.9 million. For the full year 2010 net income increased 38% to $395.4 million, compared to $286.4 million in the previous year. Overall net income as a percentage of revenue decreased 1.7% points to 22% for the 4Q 2010 and decreased 2.5% points to 21% for the full year 2010. In 2011, management expects capital expenditures will be approximately $1.9 billion for plantation acquisitions, replanting and maintenance, and approximately $25.0 million for the development of manufacturing facilities integrated with our plantation operations. These projected expenditures will be adjusted as necessary based on several factors, including some that may be beyond our control such as changes in the macroeconomic environment in the PRC, Suriname and New Zealand. Allen Chan, Chairman and CEO of Sino-Forest said, "We are very pleased to report double-digit growth for our top and bottom lines in both the 4Q and full year 2010. Infrastructure and housing construction activities and the rapid pace of urbanization in China continued to drive demand for our wood fibre, especially in inland provinces where the majority of our operations are based. With strong fibre demand and a growing portfolio of plantations under management, we sold 17.6 million cubic metres of fibre last year, thereby surpassing the original goal of 17 million cubic metres we initially set for the 2011 fiscal year." Mr. Chan added, "Our operating and financial highlights last year also included: acquiring approximately 147,000 hectares of plantations in Anhui and Jiangxi Provinces, the signing of a sixth master agreement in Guizhou Province, increasing our ownership stake in Greenheart Group to approximately 60%, and raising $600 million from a senior notes offering. Moreover, we remained on track with executing our master agreements by acquiring approximately 50% of the 1.3 million hectares covered by our master agreements, and commenced harvesting and replanting in Hunan and Guangxi Provinces." Mr. Chan continued, "With $1.2 billion of cash on hand, we plan to continue expanding our geographical reach into new provinces (central and western regions of China), where we will add 300,000 hectares of mature saleable trees to our portfolio of commercial plantations. In fact, as part of this 300,000 hectares acquisition, we signed a memorandum of understanding this week with the intention to acquire 150,000 hectares of readily harvestable commercial plantations, details of which will be announced shortly." Sino-Forest Corporation is a leading commercial forest plantation operator in China. Its principal businesses include the ownership and management of forest plantation trees, the sale of standing timber and wood logs, and the complementary manufacturing of downstream engineered-wood products. Sino-Forest also holds a majority interest in Greenheart Group Limited, a Hong Kong-listed investment holding company with operations based in Suriname, South America and New Zealand.