Gunns' plan to grow through buying plantations and building a pulp mill in Tasmania's north has been an over-ambitious distraction, say analysts.
The Australian Financial Review reports that the company's net profit tumbled nearly 100 per cent to $420,000 in the first half, and as a result its shares have fallen for three consecutive days, to end Tuesday 5.1pc down at 65c.
Investors have wiped more than $185.5 million off its market capatilisation since Friday.
On Monday the company said it would reorganise itself into four divisions to shore up its weak balance sheet, but RBS analyst Richard Johnson said the company's growth strategy has distracted it from its core business of woodchipping.
"The growth strategy over-stretched a small management team while their main business faced tough market conditions," he said.
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