August 10, 2009 / 11:00 AM / 9 years ago

UPDATE 2-Sino-Forest Q2 profit tops Street view

* Q2 EPS from cont ops $0.24 vs est $0.22/shr

* Q2 revenue up 21 pct to $224.4 mln

* Says log prices to return to 2008 levels by year-end

* Raises 2009 capex to $800 mln for plantation acquisitions (Adds details)

Aug 10 (Reuters) - Sino-Forest Corp TRE.TO posted a second quarter profit that beat analysts’ expectations, as the Canadian forest operator saw 21 percent revenue growth, driven by increased fibre demand from China. For the quarter, the company reported net income of $45 million or 23 cents, compared with $43.4 million, or 24 cents, a year ago.

Revenue rose to $224.4 million, up from $185 million, a year ago.

The company earned 24 cents a share from continuing operations for the quarter.

Seven analysts on average expected earnings of 22 cents a share, excluding items, while the consensus revenue view of two analysts was $212.3 million for the quarter, according to Reuters Estimates.

“We have witnessed an increase in fibre demand, which was attributable to China’s economic stimulus spending and rebuilding work in Sichuan province post-earthquake,” Chief Executive Allen Chan said in a statement.

Sino-Forest said that while fibre prices remained steady during the quarter, it anticipates log prices will return to 2008 levels by the end of this year.

The company, which operates in nine provinces in China, expects wood log prices to rebound about 5 percent to 10 percent in the latter part of the year, from their low level in 2008, it said in a presentation on its website.

Sino-Forest raised its 2009 capital expenditure budget for plantation acquisitions to $800 million. The budget includes $100 million for tree acquisitions in China’s Jiangxi province and about $30 million for the development of manufacturing facilities integrated with plantation operations.

Shares of the company closed at C$16.19 Friday on the Toronto Stock Exchange. (Reporting by Ashutosh Joshi in Bangalore; Editing by Maju Samuel, Jarshad Kakkrakandy)

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