Foresta’s Half-Year Loss Widens to $1.98M as Kawerau Project Lease Secured

Financial Performance and Losses

Foresta Group Holdings Limited has reported a widening operating loss of $1.98 million for the half-year ended 31 December 2025, marking a 12% increase from the $1.77 million loss recorded in the prior corresponding period. The company remains in the development phase of its innovative integrated pine chemicals and torrefied wood pellet plant in New Zealand, with no revenue generated from operations during the period.

Project Progress and Strategic Milestones

Despite the financial losses, Foresta has made significant strides in advancing its flagship Kawerau Stage 1 Project. The company executed a formal 30-year lease agreement with the Putauaki Trust for the project site, effective from March 2026, with an option to extend for an additional 20 years. This lease formalises Foresta’s commitment to establishing a commercial-scale facility aimed at producing approximately two million tonnes of torrefied wood pellets annually, offering a renewable alternative to coal in New Zealand.

Foresta’s patented process integrates the production of high-value pine resins and oils alongside black wood pellets, potentially doubling revenue streams compared to traditional single-product plants. The company has engaged leading industry consultants to oversee design, regulatory approvals, and forthcoming construction phases, ensuring adherence to best-practice governance frameworks.

Insurance Settlement and Legal Matters

During the half-year, Foresta received a final insurance settlement payment of $2.4 million related to asset damage from the 2021 Apple Tree Creek incident, bringing total insurance recoveries to $4.6 million. This outcome reflects the board’s diligent pursuit of shareholder value through comprehensive insurance claims management.

However, the company faces ongoing legal proceedings stemming from the same incident, with a sentencing hearing scheduled for mid-2026. The maximum potential penalty is approximately $1.5 million, adding a layer of regulatory risk to Foresta’s outlook.

Funding and Going Concern Challenges

Foresta’s financial statements highlight a material uncertainty regarding its ability to continue as a going concern, primarily due to ongoing operating losses and negative cash flows. The company is actively exploring various funding avenues, including private equity, debt financing, and government grants, to support the construction and operational phases of its New Zealand facility.

Management has also deferred certain project activities, such as earthworks, to mitigate cost and weather-related risks without impacting the overall project timeline. The company remains optimistic about securing the necessary capital and advancing the project into execution during 2026.

Technology and Partnerships

Foresta extended its exclusive technology license agreement with E3 Carbon GmbH to the end of 2027, securing access to advanced torrefaction technology critical for its wood pellet production. The company continues to build collaborative partnerships with local Māori iwi, government bodies, and forestry suppliers to ensure sustainable resource management and alignment with regional development goals.