Border Timbers Limited Reports 23% Increase in Revenue and Operational Improvements

Published On: October 5, 2023Company: Border Timbers Limited (BRDR.zw)
What major improvements were made in the company's operations based on the report?
Major improvements include a 23% rise in revenue, successful implementation of the plant optimization plan, improvement of planting methods, and securing order potential for poles sales target for the next two financial years. Moreover, efforts to strengthen security against arson attacks and the switch to United States Dollar as the company's operating currency can also be considered substantial steps forward.

Operating Environment and Overview

  • The financial year started with a new set of directors, following the exit from Judicial Management.
  • The six months reviewed experienced currency depreciation and power outages that led to the utilization of costly back-up generators.
  • There were complexities and uncertainties in the trading environment caused by high loaning expenses and price distortions that affected liquidity and consumer demand.

Financial Performance

  • The company’s operating activities switched to the United States Dollar as the primary currency instead of the Zimbabwean Dollar following an assessment in line with IAS 21.
  • Revenue for the period increased by 23%, bringing in US$15.8 million, mainly due to an improved product mix and consistent product quality.
  • The net profit before taxation stood at US$0.9 million, a decrease from the previous US$9.8 million fiscal year due to a non-cash gain on biological asset transformation.
  • The company’s financial status remains strong with a solid asset base.

Forestry and Sawmilling

  • The harvesting operations succeeded with the plant optimization plan steadily progressing.
  • The Company focused on enhancing the Biological Asset by implementing best practices and improving planting methods.
  • Aside from the successful operations, a significant risk the company has experienced is plantation fire damage, specifically arson.
  • Measures to counteract these occurrences have been developed and implemented, including strengthening the plantation patrol teams and acquiring new firefighting equipment.

Manufacturing

  • The sales volume of treated poles decreased by 28% due to variations in the acquisition of pole tenders.
  • The company has a promising order book that will support pole sales targets over the next two financial years.

Update on ICSID Claim – Border Award

  • There’s ongoing negotiation with the Government of Zimbabwe regarding the Border Timbers Award without any conclusive agreement reached yet.

Outlook

  • The Board of Directors is committed to delivering value for all stakeholders, banking on the Company’s intact fundamentals, and the strength of its product quality.
  • Greater performance is anticipated in the Poles business due to increasing demand within the SADC region.
  • Recapitalisation is considered a top priority, and future plans include the installation and commissioning of a new sawmill.

Useful links

About Border Timbers Limited (BRDR.zw)

Border Timbers Ltd is a timber-producing company listed on the Zimbabwe Stock Exchange. Established in 1979, the company has been supplying timber and timber products to both domestic and international markets. Their product range includes treated sawn timber, pine logs, transport services and much more. The Company is comprised of two divisions which are forestry, and manufacturing. Border Timbers owns five estates; Tilbury, Charter, and Sawerombe Estates, which are in the Chimanimani area to the south of Mutare town, as well as Imbeza and Sheba estates, which are to the north in the Penhalonga area. Logs harvested by the Forestry Division are processed at the Company’s two sawmills, Charter, and Sheba.

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Giri

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