Agriculture concern, Border Timbers, says power outages coupled with breakdown of machinery at its Charter Sawmill caused significant production and sales volumes decline for the quarter to September 30, 2019 compared to same period in the prior year.
The company has experienced a slow start to the year 2019 as there was low production seen in the months of December 2018 to April 2019 at one of the sawmills caused mainly by the general power outages and the devastating effects of Cyclone Idai that occurred on March 15, 2019 in Manicaland and some parts of the country.
Other infrastructure, such as road networks were also affected, posing a challenge in linking businesses operating in the areas affected by the devastating cyclone with their markets.
Figures for the quarter under review show that production went down 9 percent to 17 986 cubic metres while sales volumes retreated 14 percent to 18 973 cubic metres.
“Unaudited September 2019 Production and Sales Volumes Lumber production is lower compared to same period prior year due to low production at the Charter Sawmill caused mainly by machine breakdown and power outages,” said judicial manager Peter Lewis Bailey.
“The low production had a knock-on effect on sales volume as this resulted in lower sales compared to prior year,” he said.
Transmission poles production volume declined 12 percent while sales retreated 6 percent to 3 750 cubic metres.
Lumber production eased 5 percent to 15 365 cubic metres while sales volumes also suffered a decline of 14 percent to close the period at 15 223 cubic metres.
“Treated poles reflect a decline in production as focus was placed on specific orders that required re-sizing of stocks on hand. This is reflected in sales being higher than production as these sales were coming out of stock,” he said.
The judicial manager is, however, hopeful of improvements in both production and sales volumes pushed by increased demand that has remained high in the region.
Revenue for the period, however, surged 751 percent to $48,9 million compared to $5,7 million recorded during the same period in the prior year mostly driven by improved quality and output from value addition plants, which resulted in better average selling prices on lumber.
Loss for the period of $11,6 million was recorded from a profit before tax of $1,5 million due to unrealised exchange losses primarily from a foreign loan. According to Border, the net unrealised exchange loss amounts to $31,4 million.
Last November, Border requested for a voluntary suspension of trading in its shares from the Zimbabwe Stock Exchange (ZSE) as it awaited the outcome of the International Centre for the Settlement of Investment Disputes (ICSID) ruling over a land dispute with other stakeholder (Government).
“Discussions are continuing with the other party to the claim and with Government, but these have not yet been finalised. Accordingly, the Company will remain under judicial management for the foreseeable future,” said Bailey.