Border Timbers – Q3 2022 inflation adjusted revenue grew by 5% YoY

By Published On: July 25th, 2022Categories: Corporate announcement, Earnings
Border Timbers Limited 2022 Interim Results For The Third Quarter

Border Timbers Limited (BRDR.zw)

FINANCIAL OVERVIEW

Inflation adjusted revenue for the nine months ending March 2022 grew by 5% compared to the same period the previous year. This positive performance was driven by consistent quality of our Kiln Dried Timber which resulted in better average selling prices and improved customer demand.

The Inflation adjusted loss is mainly as a result of differential accounting treatment of Biological Asset gain by International Accounting Standards 29-Financial Reporting for Hyperinflationary Economies which uses the Balance Sheet approach to account for biological gain as compared to Historical Accounting. The differential accounting results in a biological loss of ZW$2.2bn under IAS 29 as compared to ZW$0.3bn biological gain under Historical Accounting.

OPERATIONAL OVERVIEW

Despite the challenging market conditions during the nine-month period under review, the business continued to generate positive cash. The environment presented both challenges and opportunities for the Company. However, our business model continues to be resilient. The challenges faced were addressed and the prevailing opportunities were pursued.

SILVICULTURE

For the furtherance of its forestry sustainability goals, the Company managed to secure the FSC (Forest Steward Council) Certification for Imbeza Estate. This initiative ensures best forestry management practices under FSC, which gives the company access to European markets, that demand FSC certified products.

The Company’s major risk remains the loss of forestry to fire. The company is continuously reviewing and strengthening its fire patrol teams as well as upgrading the firefighting equipment. The focus going forward is on intensifying our replanting activities, capitalizing on the rains, and advancing the winter planting plan.

SALES

Lumber sales volume was 7% down compared to the comparative period in the prior year. The reduction in sales volume was mainly driven by low production volume as a result of power outages as well as the extended rainy season that affected harvesting operations. The demand for Lumber remains high both in the local and export market.

Treated poles sales volume was 17% higher than the same period in the previous year, this was as a result of marketing initiatives which has seen an increase in the market share within the region.

OUTLOOK

The business is forecasting a positive trajectory and growth following its exit from Judicial Management in March 2022. With Imbeza Estate being FSC Certified, it is expected that new markets will be opened, and plans are underway to get the other Estates certified. During FY2023, old sawmilling equipment will be replaced with latest technology in order to increase production efficiency.

LYSIUS KARIMANZIRA
Finance Director
30 June 2022

Border Timbers Limited (BRDR.zw)

Share price: 20.00 ZWL cents (0.00 | 0.00% – 10/08/22)

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