Border Timbers in revenue growth

Fradreck Gorwe
Milling and timber manufacturing company, Border Timbers, posted sharp increase in revenue to $20,7 million for the 9 months to March 31, 2019 compared to $15,7 million recorded in the prior year comparative.

Growth in revenue translated to a upward movement in profit before tax from $3,8 million recorded in 2018 to $6,2 million in the period under review. The positive performance was mainly attributed to better lumber sales which increased to 45,8m3 compared to 43,4m3 recorded in the prior year comparative.

Border Timbers’ positive performance was, however, achieved in the middle of headwinds in the form of subdued production and sales volumes, in turn attributed to the devastating effects of Cyclone Idai and general power outages. Production and sales volumes also went down on the back of a dilatory export market.

“Lumber production is lower compared to the same period prior year due to low production in the months of December 2018 to March 2019 at one of our sawmills caused mainly by the general power outages and Cyclone Idai devastating effects that occurred on 15 March 2019.

“The knock-on effect of the cyclone resulted in the Charter sawmill operating for only half of the month thereby negatively affecting both production and sales into the market as the road infrastructure was decimated. However, sales volume is higher due to increased demand on the local and export markets. Higher sales volume was achieved out of sales from buffer stock.

“Treated poles reflect a decline in both production and sales as they are mostly tender based and there has been a general slowdown in the export markets hence low production compared to comparable period March 2018,” said the company’s Judicial Manager Peter Lewis Bailey in a statement accompanying the trading update.

Transmission poles volumes had gone down drastically to 9,7 m3 from a 12,7 m3 high recorded in the prior year comparative. Sales volumes dropped to 10,9m3 from 12,9m3 recorded in 2018 comparative period. Lumber production volumes had gone down, however, with a reasonable amount to 42,8m3 from 43,8m3 recorded in the prior year comparative.

Fortunately, some of the challenges have been dealt with as “electricity supply has been restored to all operations in the areas affected by the Cyclone”.

The only challenge to face the business going forward, according to the Judicial Manager, is the road infrastructure connecting the Chimanimani operations to markets. Fixing the road will best be done before the rains.

Meanwhile the company which was awarded US$25 million (in addition to interest plus legal costs) by an ICSID tribunal still awaits exit from Judicial Management.