With a forecast $6m - $8m loss last financial year FEA seems to...

With a forecast $6m - $8m loss last financial year FEA seems to be in deep trouble. Their substantially reduced income from MIS sales won't go anywhere. The debt must be a worry to the banks. Their 50% ownership of a woodchip company, Smartfibre, is contributing very little income at a time where there is weakening demand for woodchips and increased competition. Their all new u-beaut pine mill at Bell Bay is losing money hand over fist and running under capacity. All in all, not a good look for the future particularly with the ASIC investigation cloud hanging over their head. Some years back the ATO changed the tax rules which had serious consequences for FEA. At that time their MIS sales dropped to zilch and they almost went under. They seemed to have learned nothing from that experience and have continued to spend shareholder and investor funds on questionable downstream projects instead of consolidating and strengthening their balance sheet by reducing debt. They reduced their loan debt from $197m last year to $190m this year, big deal. Their land assets are their saving grace and they are now attempting to sell these and lease back. Unfortunately for them land values have/will be reduced because there will be a glut of forestry land on the market with Timbercorp and Great Southern properties going out at fire sale prices. In their favour they are now at a point where they can recycle their land in new MIS projects thus reducing capital outlay and lease costs. Gunns came to the rescue a few weeks back buying in at around 10c per share but one can be sure that was not done out of the kindness of their heart for FEA; in any case that money will soon be soaked up. As they have no positive cash flow it seems only a matter of time before FEA hits the skids. The best that can be hoped for is a Gunns take over but that might be another worry in it's own right. One other thing, the FEA/ Elders relationship does not give great confidence. Elders financial performance quite independently seems to be attracting increasing criticism. The two of them in bed together makes for loss of sleep.