Border Timbers has announced exchange losses of ZW$46.8 million, which had a negative impact on the group’s financial performance for the half year to December 31, 2019.
Resultantly, Border Timbers’ net profit declined ZW$0.8 million from ZW$3.1 million in the comparative period the previous year.
The company is under judicial management.
Said judicial manager Peter Bailey said in a trading update:
“Profit for the year is lower, mainly driven by unrealised exchange loss primarily from a foreign loan, the net unrealised exchange loss amounts to ZW$46 842 252,” The decline in profitability is despite a huge jump in revenues which amounted to ZW$110.1 million compared to ZW$12.6 million during the same period the previous year on the back of an improvement in selling prices.
“The low production had a knock-on effect on sales volume as this resulted in lower sales compared to prior year, however the improved quality and value addition at our mills resulted in improved average selling prices and better revenue.”
Treated poles also recorded a decline in both production and sales volume during the period under review.
“Currently there is increasing demand for our poles in the region and an increase in both production and sales is anticipated in the next quarter,” said the judicial manager, adding that the firm focus on maximizing value on its biological assets.
Border Timbers is also looking to increase exports on both lumber and poles.
Border Timbers was placed under judicial management in 2017 over debts to the tune of US$20 million.