The Launceston-based forest company blamed a downturn in Asian demand for its woodchips and a rising Australian dollar for a 24 per cent revenue slump that left it with a half-year profit of $400,000, compared with $33.6 million previously.

Gunns shares plummeted 19.5¢, or 22.2 per cent, to finish at 68.5¢, the lowest since the depths of the financial crisis, and a far cry from their 2005 high of $4.75.

Chairman John Gay said trading conditions had been extremely difficult and the company had experienced trouble in plantation-managed investment schemes until the end of calendar 2009, but said he hoped for an improved second half.

However, chips are piling up on Tasmanian wharves, and Gunns is closing its Longreach mill for up to eight weeks as part of a series of rolling closures.

Tasmanian stockbroker Shadforths said the half-year was worse than expected.

Private client adviser Andrew Inglis said the share price fall also reflected a poor reception for the company's strategic review, and impatience with delays on the pulp mill project.

''Of course, it is now in a very much weaker position to get the pulp mill up and going,'' he said. The $2.2 billion project, which the company says is of ''critical importance'' to it, is yet to achieve financial closure more than five years after it was announced.

"The recent market for export woodchips has reinforced the merits of the mill,'' Mr Gay said.

Swedish forest co-operative Sodra has confirmed it is negotiating to be an equity partner in the mill if it meets strict forest certification requirements.

Mr Gay said the company had appointed a financial adviser to bring the round of equity investments to a close, and was negotiating with several new ''purely financial'' investors.

Mr Inglis said the restructure would potentially separate $1 billion in forest assets into another vehicle into which pulp mill investors would have an opportunity to buy.

Auditors KPMG drew attention to the $183.7 million of capital works that Gunns said it had ''in progress'' for the mill.

KPMG partner Leigh Franklin said there was ''material uncertainty'' as to whether the carrying value of capitalised pulp mill expenditure could be recovered for the amount stated.