The $4.6m loss for the six months to 31 December is in line with expectation, unlike a year when it was blasted by the ASX for an unexpected 98.7% fall in profits.

Revenues for H1 2011 were up 11.5% year-on-year to $363.4m while earnings before interest and tax saw a $5m loss.

Gunns is undergoing a strategic review driven by a need to improve its much-maligned sustainability credentials, which have stalled its mill project.

“The objective of the strategic review is to bring the pulp mill development to a financial close,” said chairman CJ Newman in the statement to the ASX.

The financial report pointed out just how important the Bell Bay is for Gunns’ future. “The Bell Bay pulp mill is the single most earnings accretive project available to Gunns.”

Newman also pointed to the growing importance of sustainability to key export customers. “The traditional Japanese market has continued to shift its product preference to plantation fibre from native forest resource. This has had significant impacts on our Tasmanian operations leading to a major business restructure, which is currently being implemented.”

Gunns managing director Greg L’Estrange called the restructuring “a critical stage for the company, which has necessitated us divesting non-core assets and operations, including the Tamar Ridge Wines business, walnut operations and arranging a progressive exit from the construction business”.

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