By Almot Maqolo.
HARARE, Zimbabwe (News of The South) – Milling and timber manufacturing firm, Border Timber reported a 80% jump in revenue for the year ended June 30, 2019 to ZWL$38.41 million from ZWL$21.3 million backed by better average selling prices (ASP) on lumber. Also this came at a time when the company recorded subdued production and sales volumes.
Net loss before tax for the period widened to ZWL$12.91 million from ZWL$340 696 in the same period last year. Loss for the year was mainly
driven by unrealized exchange loss on a foreign loan, the unrealized exchange loss amounts to ZWL$24.15 million. However, the company
recorded a non-cash net biological asset valuation gain of ZWL$11.95 million.
Cash profit before tax, after adjusting for non-cash items rose 121% to ZWL$12.98 million from ZWL$5.86 million.
In the period, the milling and timber manufacturing firm noted that lumber production was lower compared to the same period prior year.
This was attributed to low production in the months of December 2018 to April 2019 at the Charter sawmill caused mainly by the general
power outages and Cyclone Idai devastating effects that occurred on 15 March 2019.
Lumber production stood at 55 800 cubic meters, representing an 11% decline from 62 519 cubic meters in the prior period.
“The knock-on effect of the cyclone resulted in the Charter sawmill resuming operations in the first week of May 2019, thereby negatively
affecting both production and sales into the market as the road infrastructure was decimated. The incessant power outages especially in the month of June 2019 negatively affected production at the Sheba sawmill thereby exacerbating full year production with the knock-on effect affecting sales volume,” said the company’s Judicial Manager Peter Lewis Bailey in a trading update on Tuesday.
In the same vein, overall production volumes plummeted to 68 896 cubic meters from 89 140 cubic meters.
“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 June 2018.”
Border Timber’s sales volumes declined from 87 744 cubic meters in the previous period from 72 600 cubic meters.
The company’s exit from judicial management, Bailey said is being delayed by the settlement and sharing of the US$25 million that was
awarded to the company by an International Court for Settlement of Investment Disputes (ICSID) tribunal.
“Although the award is final and binding, there is currently no clarity around the Government’s timetable for settlement and how the
award will be shared between the Company and the other claimants. The exit of the Company from Judicial Management is delayed as a result of this.”
International arbitration proceeding between Border Timbers, other private parties, and the Government, pending at the ICSID since 2010
in respect of the compulsory acquisition of its land. According to Border Timbers, an award was issued in its favor in 2015, but government subsequently filed an application to annul the award.
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