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Border Timbers Losses Widen, Despite Improved Revenue Performance

Listed timber producer, Border Timbers’ strong revenue performance was not enough to offset yawning losses during the 12 month trading period ending June 30 2019 as an unrealized exchange loss on a foreign loan amounting to ZWL $ 24.157 million weighed heavily on the company’s financial position.

Net loss firmed to ZWL $ 12,916,742 during the period from ZWL$340,696 in June last year.

In contrast, revenue performance improved to ZWL$ 38,418,978 as at  June 30 2019 from ZWL$ 21,300,577 same period last year driven by better average selling prices (ASP) on lumber.

“Revenue saw positive improvement compared to prior comparable period mostly driven by better average selling prices (ASP) 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,” company Judicial Manager, Peter Lewis Bailey said in a statement accompanying the results.

On the production side, the company cumulative volumes declined to 68,896 cubic metres from 89,140 cubic metres realized comparable period last year.

Production of transmission poles marginally slumped to 14.551 cubic metres from 16.952 cubic metres while sleepers drastically fell to 454 cubic metres from 10.226 cubic metres.

Lumber production also slightly dropped from 57.595 cubic metres from 60.566 cubic metres.

“Lumber production is lower compared to the same period prior year due 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,”

“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,” said Bailey.

The company was also affected by the incessant power outages that also affected production at its Sheba sawmill thereby exacerbating full year production with the knock-on effect affecting sales volume.

The company however recorded a non-cash net biological asset valuation gain of ZWL11,955 million.

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