Chronicle Editor
FORESTRY and saw milling firm, Border Timbers, said yesterday exchange losses of up to $46.8 million hit on its financial performance for the half year ending December 2019, resulting in net profit slumping to $0.8 million from $3.1 million in the comparative period the previous year.
Border Timbers was placed under judicial management three years ago after struggling to settle debts of around US$20 million. Trading in the company’s shares on the Zimbabwe Stock Exchange was subsequently suspended in November 2018.
“Profit for the year is lower, mainly driven by unrealised exchange loss primarily from a foreign loan, the net unrealised exchange loss amounts to ZW$46 842 252,” judicial manager Peter Bailey said in a trading update.
The decline in profitability is despite a huge jump in revenues, which amounted to $110.1 million compared to $12.6 million during the same period the previous year on the back of an improvement in selling prices.
Lumber production, Bailey said, was lower compared to the same period the prior year as a result of power outages.
“The low production had a knock-on effect on sales volume as this resulted in lower sales compared to prior year. However, the improved quality and value addition at our mills resulted in improved average selling prices and better revenue,” he said.
Treated poles also recorded a decline in both production and sales volume compared to same period prior year due to low demand.
“Currently there is increasing demand for our poles in the region and an increase in both production and sales is anticipated in the next quarter,” Bailey said.
He said the company would continue to focus on maximising value on its biological assets, improving quality as well as increasing exports on both lumber and poles. — New Ziana
Bongani Moyo
Online Reporter