Sino-Forest reports double-digit growth, $1.2 billion cash on hand

By Lisa Kerner

Charlotte, N.C., March 15 - Sino-Forest Corp. experienced double-digit growth for its top and bottom lines in both the fourth quarter and the full year, chairman and chief executive officer Allen Chan said during the company's fourth-quarter and full-year 2010 earnings call on Tuesday.

Revenue for the fourth quarter rose 63% to $767 million, and the company's full-year 2010 revenue neared $2 billion, an increase of 55% from the prior-year period.

The company surpassed its goal of selling 17 million cubic meters of wood fiber - a goal originally set for 2011 - by selling 17.6 million cubic meters of fiber in 2010, Chan said, attributing the increased demand for wood fiber in part to the rapid urbanization of China.

Sino-Forest will use its $1.2 billion of cash on hand to add 300,000 hectares of mature salable trees in new provinces in the central and western regions of China, according to Chan.

The company raised $600 million during 2010 from a senior notes offering.

Quarterly, full-year results

Net income for the fourth quarter was $170.9 million, a 52% increase, while net income for the year increased 38% to $395.4 million, compared to the prior-year periods.

Net cash flows from operations increased for the quarter and the year. For the fourth quarter, net cash from operations was $364.9 million, compared with $226.1 million for the same period in 2009.

For the full year, net cash from operations was $840.1 million, compared with $784.5 million in 2009.

Diluted earnings per share for the fourth quarter rose 32% to $0.65. Full-year diluted earnings per share grew 16% to $1.60.

Selling, general and administrative expenses for the quarter and the full year were up, primarily due to increased staff costs, additional leasing charges and the incremental costs of newly acquired subsidiaries in 2010.

Selling, general and administrative expenses for the fourth quarter 2010 were $30 million, up 57% from $19.1 million in same period of 2009.

For the full year, selling, general and administrative expenses rose 40% to $89.7 million from $64 million in 2009.

Sino-Forest, which has executive offices in Toronto and Hong Kong, operates forest plantations in China. It sells timber, logs and engineered wood products.

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