HONG KONG - Greenheart Group Limited( http://www.greenheartgroup.com ) ("Greenheart Group" or the "Company"; HKEx stock code: 0094) today announced financial results of Greenheart Group and its subsidiaries (the "Group" or "Greenheart") for the first six months ended June 30, 2013 ("H1 2013"). Revenue increased 57.4% to HK$319.0 million with EBITDA of HK$69.2 million compared to EBITDA of HK$33.2 million in the first six months of 2012 ("H1 2012"). The Group's New Zealand radiata pine softwood business reported a 56.5% increase in segmented revenues by harvesting 307,000 cubic metres and exporting 262,000 cubic metres at an average export-selling price of US$133.70 per cubic metres compared to 195,000 cubic metres at US$113.20 per cubic metres in H1 2012. The Group also enjoyed increased demand for its certified wood products from Suriname and reported a 90% increase in segmented revenues in H1 2013 as compared to H1 2012. The Group's consolidated revenue for the last twelve months ("LTM") ended June 30, 2013 was HK$611.6 million which is 35 times greater than the reported revenue of HK$17.0 million in fiscal 2010, the reporting year prior to the commencement of the company's new investment in Suriname and New Zealand. EBITDA was HK$62.3 million for the last twelve months ended June 30, 2013.
Mr. Judson Martin, Chairman, Chief Executive Officer and Executive Director of Greenheart Group, said, "We are particularly pleased with the performance of our New Zealand softwood business and look forward to the completion of our hardwood processing facility in West Suriname and achieving full capacity results in 2014. During the first six months of 2013, we witnessed two distinct changes in market dynamics that drove new demand for our sustainable forest products."
"The first major change was New Zealand surpassing Russia as the largest supplier of logs to China. Widely used throughout the plywood, furniture and construction markets, New Zealand radiata pine is now the single most imported wood species into China and during this reporting period we increased exports by over 34.2% to take advantage of this changing dynamic. We also broadened our geographic and customer base to reduce dependency risk with sales to India accounting for 17.7% of our softwood revenue during the first six months of 2013. India is the world's third largest softwood market as well as a major tropical hardwood market and we will continue our efforts to increase our customer base there. We are now well positioned to benefit from China and India's increasing demand and we are confident in our ability to increase our harvest volume to approximately 650,000 cubic metresin 2013, up from 559,000 cubic metres in 2012, 350,000 m3 in 2011 and 7,630 cubic metres in 2010."
"The second major change in market dynamics was the introduction of more stringent regulation in support of the sustainable management of our world's precious forest resources. On March 3, 2013, the European Union Timber Regulation ("EUTR") came into effect prohibiting the circulation of illegally logged wood and requiring European importers to prove legality and sustainability of all their products. This increased regulation has directed European demand towards certified wood products, in particular those with the rigorous and globally recognized Forest Stewardship Council ("FSC") certification and will help increase public awareness of this important issue."
"At Greenheart, we welcome this new regulation and increased public awareness. Over the last two years, we have achieved varying levels of FSC accreditation for all our Suriname operations making us part of the world's 6% of tropical forests that are FSC certified. With so few certified suppliers, our strategy is to continue expanding the forest concessions we own and manage in Suriname, increase our production capacity by building more world-class processing facilities and become a world-leader in the production of legal, sustainable FSC-certified lumber and other wood products."
"In the last two plus years, our company and employees faced significant challenges as a result of the restructuring of our former major shareholder. In response, we adopted a strategy to move slow and with deliberate caution while we continued to build our company that began with renewed vigor in 2011. We focused our effort and capital investment into two businesses; renewable softwoods from New Zealand and certified hardwoods from Suriname. As China's wood deficit continues to increase and regulations governing tropical hardwood tighten, our investments have become more valuable. Our brand is now globally recognized and our products are in high demand from our customers in China, India, New Zealand, North America, Europe and the Caribbean."
"Our New Zealand softwood business has developed very well over the past thirty months. We are now leveraging our strong market position to explore further growth opportunities in the region. Our path to growth and profitability has taken longer than planned in Suriname due primarily to our conservative operating strategy. We have been patient, persistent and have worked very hard to become the industry leader in Suriname. With the positive hardwood market dynamics and the completion of our West Suriname wood processing facility by end of 2013, we are now well positioned to move to profitability and implement our planned future growth initiatives in other regions of the country. Our keen focus and challenge in our hardwood business is to produce the supply to meet the strong demand. We are confident in our ability to do so and have the people in place to execute the plan. Our experienced management team has remained in tact and high quality people continue to be recruited."
"On behalf of our Board of Directors, I would like to thank our employees, customers and shareholders for your continued support. We are excited about our future and confident in our ability to turn Greenheart into a profitable world-class forest products company."
*EBITDA refers to the Group's earnings / (loss) before finance costs, tax, depreciation, forest depletion costs as a result of harvesting and amortization.
Greenheart's interim financial results for 2013 can be found on its website (www.greenheartgroup.com) and on the Hong Kong Stock Exchange website.
About Greenheart Group Limited
Greenheart Group is a growth focused investment and integrated forest-products company listed on the Stock Exchange of Hong Kong (HK:0094). Greenheart currently owns renewable softwood plantations in New Zealand and certified hardwood concessions and other interests in Suriname, South America. Learn more at www.greenheartgroup.com.
Source: Greenheart Group Limited
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