The share price of TFS Corporation Limited (ASX: TFS) surged more than 28% today to a high of $1.715 after the company released its first-half earnings results.
Although the shares rallied strongly today it's worth noting that they had fallen into a slump since the beginning of the year. They're now fetching roughly the same price they were in late December.
What Happened?
TFS Corporation is a business which owns and manages Indian Sandalwood plantations in northern Australia. The sandalwood is used in various products, ranging from perfumes and incense sticks (sandalwood retains its fragrance for decades) to pharmaceuticals as well.
For the first-half, the company said that cash EBITDA was up 29% on the prior year to $8.6 million, while net profit after tax (NPAT) rose 23% to $67.4 million. However, total revenues fell to $150.6 million, down from $160.3 million in the prior corresponding period.
The company's managing director, Frank Wilson, said: "We have had a strong start to the year and we are extremely well placed to meet the milestones set for 2016 under our growth strategy."
What's more, TFS Corporation also stated that it had signed new multi-year agreements with buyers in both India and China "at attractive prices for TFS". That means that the company has now forward-sold all of its yield from the forthcoming two harvests.
It said: "We are now in the enviable position of having multiple customers across multiple markets in four different continents and this perfectly illustrates the global demand for Indian sandalwood."
The company said it is still on track to growth cash EBITDA (which means, earnings before interest, tax, depreciation and amortisation) between 5% and 10% for the full-year, with earnings weighted more towards the second-half.
