- Profit before tax skyrocketed 1148% to ZW$4.8 billion
- Revenue grew 23% to ZW$2.2 billion
- Production volume and volume sold (poles) pared 61% and 68%, respectively
Harare- ZSE-listed concern, Border Timbers’ profit before tax skyrocketed 1148% to ZW$4.8 billion from ZW$385 million in the comparative period prior year. Revenue grew 23% to ZW$2.2 billion, up from ZW$1.8 billion in the comparative period prior year despite volumes sold and production volumes for poles paring 68% and 61% respectively in the same period.
Lumber sales volume was 23% down, driven by low customer demand in the local market in the first two months of Q1 with the month of September showing good signs of a rebound. The firm believes the demand for Lumber will remain strong in the local market and will continue being aggressive to expand the export market.
The decline in pole sales volume was mainly because of timing differences that are usually experienced in the acquisition of tenders, which is asymmetrical. However, the concern expects improved performance in the poles business due to the expected demand for the product in the SADC region mainly for the rural electrification projects.
The business’s operations were characterised by changes in the macroeconomic environment as the central bank implemented tighter monetary measures to arrest inflationary pressures.
The apex bank’s measures to increase the interest rates and introduce gold coins, resulted in the easing of inflation and the company anticipates the trend to continue through to the end of the year.
The primary silvicultural focus of the company is to grow and maintain the forests to further strengthen the Biological Asset, so the loss of forest to fire remains the major business risk. To mitigate that, the company has strengthened its plantation patrol teams through enhanced firefighting training and acquisition of additional firefighting equipment during the first quarter to 30 September 2022.
Harvesting and sawmilling activities are fairly in line with expectations but the company’s aged sawmilling equipment has resulted in frequent breakdowns. Nevertheless, plans are underway to replace the old equipment with new high-tech mills to be commissioned by the end of FY’23.
Recapitalisation remains the producer’s key priority with the replanting program already on course to reduce the unplanted area to the industry standard of 5% in the next three years.
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