***SHAW Analyst Comments: Timbercorp's 02 project sales *** July...

***SHAW Analyst Comments: Timbercorp's 02 project sales
*** July 2, 2002
*** 2002 Project sales

Timbercorp (TIM) has advised that sales under various projects increased by 7% to $51m, comprising 1,100ha ($27m) of almonds, 462ha ($11.6m) of olives & 3,200 ha ($12.7m) of timber.

Reasonable result

While a reasonable result, was below the total offering & expectations of around $55m, with excess applications for almonds & some leakage to Macquarie Protected Equity Loan & Gunns Plantations in last weeks. Is still positive for TIM going forward, as:

1) It adds $14m pa to the annuity style income in 03 & 04 increasing the proportion of total revenue from 39% to 50 -55% of total revenue. This will increase beyond 05 with commercial production of Almonds (3.0% of gross crop value) & Olives (3.5%).

2) The sales removed $25m of the $30m in unsold developments as at 30 June from the Balance Sheet, strengthening cash flow & reducing gearing.