eBusiness Weekly
Kudakwashe Mhundwa
Forestry and sawmilling concern, Border Timbers says lumber production volumes for the eight months to February 2018 declined 26 percent compared to the same period last year due to power outages experienced in the trading period.
However, sales volumes for the period under review increased 15 percent.
Lumber is a type of wood that has been processed into beams and planks. It is mainly used for structural purposes but has many other uses as well including construction.
In a trading update Boarder Timbers Judicial Manager Peter Bailey said Lumber production volumes which declined to 46 605 from 58 777 in FY 2018 were as a result of power interruptions faced at one of the company’s sawmills.
Bailey attributed the growth in sales from 51 146 in 2018 to 56 467 to high demand from both the international and local markets, although the agricultural concern had to turn to buffer stocks to meet demand.
“Lumber production is lower compared to same period last year due to low production in the months of December 2018 to February 2019 at one of our sawmills caused mainly by general power outages. However, sales volume is higher due to increased demand on the local and export markets. High sales volume was achieved out of sales from buffer stock,” he said.
Likewise, revenue grew 14 percent to lend at US$16 423 007 from US$14 254 414 achieved the same period last year driven mostly by Lumber sales. Similarly, net profit before tax increased to US$4 386 336 from US$2 823 897 in FY2018.
However, both sales and production volume of treated poles declined due to limited demand on the market.
“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 market hence low production compared to comparable period in February 2018,” said Bailey.
The agricultural concern, was suspended from trading on the Zimbabwe Stock Exchange in November last year after the company had requested for a voluntary suspension of trading in its shares from the local bourse while it awaits the outcome of the International Centre for
the Settlement of Investment Disputes (ICSID) ruling over a land dispute with other stakeholders.
Accordingly, the ZSE sought and was granted permission to suspend trading of the company’s shares by the Securities and Exchange Commission of Zimbabwe.
The move to suspend trading follows an 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 favour in 2015, but Government subsequently filed an application to annul the award.
The final decision of the ICSID on the annulment application by Government is expected “any time from now”.
As such, the company applied for a temporary suspension from the local bourse as the outcome of the ICSID will have an effect on its financial statements.
