Gunns announces AU$900m loss

The Tasmanian timber company Gunns has posted a massive annual loss in the closing moments of the annual financial reporting season. The AU$904 million interim loss for the 2011-2012 financial year was revealed to the stock exchange just after 7:00pm on Friday night, after the exchange had closed and all major TV news bulletins were underway or finished reported ABC. Shadforth Financial Group analyst Matthew Torenius said releasing results late was not uncommon for companies posting losses.

The loss compares to an almost AU$356 million loss for the previous 12 months. Gunns blamed it on costs associated with a major restructure and the state of the export woodchip market, which forced significant write-downs of forestry assets and its pulp mill project. The company told the stock exchange underlying earnings for the period were nearly AU$30 million, down from nearly AU$42 million in the previous 12 months.

Gunns shares have been in a trading halt for almost six months as it tries to negotiate a AU$400 million dollar capital raising. For the full release, visit www.gunns.com.au.

Understandably, it's been reported this week that as a consequence of the company’s performance, insolvency firms are now circling and jockeying for the job of taking on management of the company should it fall into administration. For a more detailed report,
click here.

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