BY MISHMA CHAKANYUKA
BORDER Timbers Limited (BTL), posted a 80% increase in revenue to $38,4 million in the 12 months ended June 30, 2019, driven by better average selling prices on timber.
The increase was from a 2018 figure of $21,3 million.
“Revenue saw positive improvement compared to prior comparable period mostly driven by better average selling prices (ASP) on lumber,” the company’s judicial manager, Peter Bailey, said in the group’s trading update.
During the period, BTL’s net loss before tax widened to $12,9 million from $340 696 recorded in the previous year, owing to unrealised exchange loss on a foreign loan.
“Loss for the year is mainly driven by unrealised exchange loss on a foreign loan, the unrealised exchange loss amounts to $24,15 million,” Bailey said.
Bailey said both lumber production and sales volumes were down 11% and 5%, respectively due to incessant power cuts and Cyclone Idai effects.
“Lumber production decreased to 55 800 cubic metres from 62 519 cubic metres while sales declined to 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’s devastating effects that occurred on March 15, 2019,” he said.
“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.”
Treated poles sales volumes declined from 16 952 cubic metres to 14 551 cubic metres during the period.
Poles produced amounted to 12 647 cubic metres in 2019, down from 16 488 cubic metres recorded in prior year.
“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,” Bailey said.
He said the company’s exit from judicial management was being delayed by the settlement and sharing of the US$25 million that was awarded to the company by an International Centre for Settlement of Investment Disputes (ICSID) tribunal.
“As referred to in the trading update for the 11 months to May 2019, the company was awarded approximately US$125 million (in addition to interest plus legal costs) by an ICSID tribunal,” Bailey said.
“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.”
The company was placed under judicial management in 2016 after failing to service debts to several financial institutions.