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ANCHORAGE -- Sealaska Corp., the Juneau-based Alaska Native corporation, suffered a loss of $122 million last year, according to the company's newly released annual report. Despite the loss for accounting purposes, the regional corporation had a positive cash flow.
A blistering combination of bad investments, punishing competition, a bear market on Wall Street, and the worst timber prices in more than a decade contributed to the company's poorest performance in 18 years, the report says.
Sealaska told its 16,000 Tlingit, Haida and Tsimshian shareholders in February to brace for losses of $90 million to $120 million. The final result was even worse.
Sealaska describes the situation as a setback that will hurt the company for several years. It's banking on a new chief executive and strategic investments in gaming and telecommunications to rescue the troubled company.
"We believe we have the commitment and strength to reverse these difficulties," said Chris E. McNeil Jr., president and chief executive, in the report. McNeil, the former general counsel, replaced Robert Loescher as top executive in January.
Sealaska is a much smaller company than it was just a few years ago. It had revenue of $72 million last year, mostly from logging, down from $84 million the prior year when it posted a $10 million profit. In 1997, Sealaska's revenue was $202 million.
Despite the revenue decline from the prior year, Sealaska logged more of its old growth forest in 2000 than it did in 1999. The volume of timber cut last year was up 28 percent from the previous year, 4,244 acres compared with 3,632 acres, the report says. Timber prices have declined substantially in recent years.
The bulk of the company's 2000 losses stemmed from failures in its precision plastics and limestone mining operations, along with a writedown on the value of timber purchased from a village corporation in Hoonah.
Despite the overall losses, the company had a positive operating cash flow of $7.1 million.
Sealaska is cutting back on spending and aggressively trying to sell its plastics operation in Mexico and the limestone mine on Prince of Wales Island. The losses for last year include $73 million for writing down the value of the two ventures.
The value of the company's permanent fund investment account fell $24 million last year, reflecting declines in the financial markets. At the end of last year, it was worth $108 million.
But the corporation is hoping to profit in future years from logging, its investment in a California casino, and a telecommunications venture with AT&T and two other Native corporations called Alaska Native Wireless.