Border Timbers’ profit slumps

Business Reporter
Zimbabwe Stock Exchange-listed concern Border Timbers Limited’s profits for the year ended June 30 2013 fell 39 percent to US$1,1 million from US$1,8 million on the back of increased finance costs during the period under review.Finance costs went up 47 percent from US$1,9 million in 2012 to US$2,8 million in the period under review. Revenue for the period recorded a 14 percent decline from US$28 million to US$24 million in June 2013.

This was primarily as a result of closure of the veneer mill at Paulington factory which recorded a 39 percent decline in volume from the prior year. Total sales volume for the factory decreased by 36 percent to 5 958 m3. The company temporarily stopped production at the factory in February this year as the unit had become unprofitable.

Operating profit for the period was US$5,3 million compared to US$4,6 million during the previous period. On the balance sheet, biological assets rose from US$97,8 million to US$105,5 million in the period under review resulting in total value of assets going up by 5,4 percent from US$155,2 million to US$163,5 million.

Current liabilities also reflected a 14,9 percent increase from US$48,4 million to US$55,6 million in the period under review. The company’s basic earnings per share dropped from the prior years figure of US4,25c to US2,78c while the headline earnings per share also went down to US2,97c from US4,33c in the prior year.

The operational review showed that for the forestry and saw-milling division, full year plantings decreased to 760 hectares from 1892 hectares in 2012. The company spent a total of US$3,4 million on silviculture activities from US$4 million in the prior year.

A total of 133 hectares was lost to fires during the current year bringing to 9 917 hectares the total loss to fires since 2000.
Sawmill output was 12 percent lower than the previous year due to an 8 percent decrease in round wood production which fell to 198 071 cubic metres in the period under review.

Going forward, the company said it was working on options to reduce costs and stabilise its borrowings. The company also said it is working towards alligning its overheads to to the size of its operation.