Border Timbers profits drop

million from the prior period driven by increased sales volumes in rough sawn timber, poles and boards.

The EBITDA for the period was US$3,4 million from US$4,1 million, indicating margins of 12,2 percent down from 18,8 percent. On the balance sheet, biological assets rose from US$90,4 million to US$97,8 million as a result of capital expenditure during the year amounting to US$7,4 million. Of this amount US$4 million was used on plantation development. Current liabilities also reflected a 154 percent growth in short-term loans to US$9,8 million.

The operational review showed that for the forestry and sawmilling division, a total of 1 891ha were planted during the period up 48 percent from last year. Money spent on silviculture activities was US$4,1 million, up from US$2 million year earlier.

A total of 1 452 hectares were destroyed by fire. Total round wood production increased to 216 560 cubic metres up 14 percent prior year resulting in total sawmilling output of 76 307 cubic metres, an increase of 24 percent. Recoveries were, however, below budget due to the effect of salvage timber after the fire damages, which had an impact on the grade yields and the final average selling price per cube.

At the Paulington factory, total volume output was 9 627 cubic metres, an increase of 9 percent on prior year while total sales volume for the period was 9 347 cubic metres.

On the outlook, the group has had to rely on short-term debt as very few local financial institutions were in a position to offer long- term funding required by the forestry operation. Focus is, however, now on refinancing the short-term debt to long term. The group also intends to grow its biological assets and to reduce the overall cost of production of all timber and timber-related products.

More contractors would be engaged across the group to lessen the burden on the business and improve return. Demand for the group’s business has remained firm, driven by ongoing housing development projects and strong demand for transmission poles.