OREANDA-NEWS. September 03, 2012. RusForest generated revenue of SEK 154.2 million (USD 23 million) and SEK 276.9 million (USD 41.5 million) for the three and six months ended June 30, 2012, respectively, as the company said in the press release received by Lesprom Network.

The Group's revenue from the main product (sawnwood) increased in line with volumes. Sawnwood volumes increased by 84% in 2Q 2012 compared with 2Q 2011. The revenue increased by 67% for the same period. The difference is attributable to the fact that most of the total increase in sawnwood sales volumes comes from LDK-3 (Arkhangelsk 1), i.e. 15,804 cubic metres out of 35,900 cubic metres. LDK-3 is selling FOB Arkhangelsk and the average price is approximately 30% lower than in Siberia where the price includes delivery to the border.

RusForest's 2Q EBITDA was SEK -92.2 million (USD 13.8 million) and SEK -161.5 million (USD 24 million) in 1H 2012.

The Group’s net loss for 2Q 2012 was SEK 184.8 million (USD 27.7 million), compared to SEK 69.3 million (USD 10.4 million) in 2Q 2011. The share of the loss generated by the Gravel asset was SEK 1.5 million (USD 224,715).

Garrett Soden, the Company’s new CEO, commented: “RusForest is unique in the capital markets today as the only publicly-traded forestry company focused on Russia. The Company is vertically integrated from forest leases through sawmills, is self-sufficient in raw material and has access to some of the highest-quality, lowest-cost timber in the world. The Company has near-term operational and financing challenges, but I am excited to join with a clear mandate to drive efficiency and create shareholder value.”

RusForest’s cost of sales for 2Q 2012 was SEK 209.1 million (USD 31 million). 2Q 2012 included full amounts for Kansky, Adar and NTG, acquired towards the end of 2Q 2011. Apart from the growth of the Group, all of the cost items nearly doubled due to increased harvesting volumes. Harvesting of logs (both saw and pulp) increased by approximately 35% compared with 2Q 2011 coupled with an 84% increase in volumes of sawnwood shipments.

Distribution expenses amounted to SEK 32.9 million (USD 5 million) and included customs costs (except duties offset against revenue), railway tariffs, loading and hauling-to-loading costs. Railway tariffs have been systematically increased by the monopoly Russian railways (10-15% semi-annually). Wagon rates have recently stabilized but increased compared with 2Q 2011 by approximately 15-20%.

Other income of the Group amounted to SEK 8.5 million (USD 1.3 million) and primarily represented the reimbursement of overpaid stumpage fees following successful court cases in Ust-Ilimsk (including Tuba plots).

RusForest is a publicly-traded Swedish forestry company operating in eastern Siberia and the Arkhangelsk region of Russia. The Company controls approximately 3 million hectares of timber through long-term leases with an annual allowable cut (“AAC”) of approximately 3.6 million cubic meters. RusForest owns five sawmills in close proximity to its forest leases and is self-sufficient in raw material to produce more than 400,000 cubic meters per year of sawnwood products.