"Outlook MWY reiterated it expects to achieve FY18 consensus...

"Outlook

MWY reiterated it expects to achieve FY18 consensus forecasts. It is important to note that MWY's earnings are seasonally skewed to the 2H, with higher volumes (winter affects the 1H) and usually higher USD woodchip prices. (underlining is mine)

Management said it is confident of achieving a much strong 2H18 given the delayed shipments were loaded in January and it has locked in better USD woodchip prices for its export shipments for the remainder of the financial year. In fact the 2H18 woodchip price increase of 10% is the best in over 10 years, reflecting the industry's positive industry fundamentals. We understand MWY has secured price rises as high as 16% for some of its more niche products. We believe supply constraints in key supply regions and an estimated long-term hardwood chip supply deficit in Asia (11% by 2030 according to RISI) will underpin further price rises over coming years.

In the 2H18, MWY will also benefit from full six month contribution from the PMP acquisition, which management said is performing very well. Also assisting the 2H18 is additional woodchip export volumes from Tasmania and the Tiwi Islands and additional export log sales from the Tiwi Islands. MWY is actively hedging to manage currency risk."

Morgans - Feb'17
Add rated TP $3.00