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TFS Doubles Profits for Q1 FY16; Reconfirms Earnings Guidance

TFS Doubles Profits for Q1 FY16; Reconfirms Earnings Guidance
Dec 01, 2015 By Imran Valibhoy Tags: TFC

TFS Corporation Limited (ASX:TFC) reported NPAT of $40.5 million for the quarter ended 30 September 2015, compared to $18.6 million in the pcp.

TFS is the world’s largest owner and manufacturer of commercial Indian sandalwood plantations and operates sandalwood processing and oil distribution facilities from Albany, Western Australia. The company reported cash EBITDA of $18.6 million, which is a strong improvement over a loss of $6.2 in the pcp.

According to the company, the earnings growth reflected significant growth in both cash and non-cash revenues. The company posted $109.9 million total revenue for the quarter, which is a 62% increase over the pcp.

The growth in TFS’s cash revenue is attributed to an increase in establishment fees and land sales. Non-cash revenue increased due to a tree revaluation gain of $61.4 million, reflecting the impact of the weakening AUD against the USD.

TFS reaffirmed that the company’s working capital movements were in sync with its typical seasonal cycle, as cash and cash-equivalents totalled $30.4 million for the quarter. The company also completed the acquisition of its US pharmaceutical partners, Santalis Pharmaceuticals and ViroXis Corporation during this quarter.

According to TFS’s Managing Director, Frank Wilson: “The growth in our cash earnings reflects the ongoing strong demand for new plantations as well as further growth in sales of Indian sandalwood products to end markets. The result is a highly encouraging start to the 2016 financial year given our earnings are heavily weighted to the last quarter of the last quarter of the financial year when the majority of our plantation sales are finished.”

TFS reconfirmed its earnings guidance as it expects Cash EBITDA to increase in the range of 5% to 10% for FY16.

TFC traded at $1.73 at the close of trading on 30 November 2015 and is up 11.3% for the year.

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Imran Valibhoy Author: Imran Valibhoy Dec 01, 2015

Since Joining the firm in 2006, Imran has worked on a range of M&A and Capital Market transactions in the natural resources, mining as well as projects in the renewable energy sector. Prior to joining Wise-owl, Imran worked at Euroz Securities in Perth, aiding in the advisory and valuation of companies in the mining and industrial sectors in Australia. Imran has a Masters in Banking & Finance from City University's Class Business School in London and a Bacheloor degree in Commerce from UWA.

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