Border Timbers remains stuck in the red in FY2019

Harare, (New Ziana) –Timber producing company, Border Timbers said on Tuesday it recorded a net loss before tax of ZWL$13 million for the year ended June 2019, further down from a loss of ZWL$341 000 in the comparable period last year as production and sales slowed down on the back of Cyclone Idai devastation and power outages.

The company, which was placed under judicial management three years ago after struggling to settle debts of around US$20 million, saw its revenue for the period jump 80 percent to ZWL$38.41 million despite a decline in sales.

The firm’s curator, Peter Lewis Bailey said the improvement in revenue was on the back of better “average selling prices” on lumber.

“Loss for the year is mainly driven by unrealized exchange loss on a foreign loan, the unrealized exchange loss amounts to ZWL24 157 988,” he said.

“We also recorded a non-cash net biological asset valuation gain of ZWL11 955 166.”

A combination of the effects of Cyclone Idai and power outages saw production of poles slump to 68 896 m3 from 89 140 m3 during the 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,” Bailey said.

“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.”

Sales volumes were, as a result, down to 72 600 m3 from 87 744 m3.

While Border Timbers has generally improved its financial performance since placement under judicial management, Bailey said delays in the settlement of a legal dispute in which the firm was awarded a US$125 million settlement, were also impacting on the firm’s ability to come out of the curatorship.

“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,” he said.

“The exit of the company from judicial management is delayed as a result of this.”

Trading in the company’s shares was suspended on the Zimbabwe Stock Exchange in November last year.
New Ziana