Border Timbers pushes for recapitalization

Listed timber producer Border Timbers in its trading update for the nine months to March 31, 2023 said it is still pushing for the recapitalization of its operations in order to eliminate losses due to breakdowns.

Border Timbers chairman Elias Hwenga in a trading update said, “Recapitalization remains a key priority with our replanting program already on course to reduce the unplanted area to the industry standard of 5 percent in the next three years.”

In the period under review, the company said harvesting and sawmilling activities were below target, due to frequent breakdowns of aged sawmilling equipment.

“Recapitalization of the sawmills is on course with the installation of new sawmills at Charter and Sheba expected in June 2023 and December 2023 respectively,” Mr. Hwenga added.

In terms of financials, revenue for the nine months was 125 percent higher at $7,7 billion compared to the same period prior year.

The consistent quality of Kiln Dried Timber which resulted in better average selling prices was attributed as the reason for such revenue increase whilst a high profit before tax was driven mainly by fair value gain due to biological assets transformation.

Lumber sales volume was 12 percent down compared to the comparative period in prior year and the reduction in sales volume was mainly because of lower production from the sawmills, which the company expects to improve after the commissioning of the new sawmilling equipment.

“The demand for lumber remains strong in the local market and the Company continues to aggressively expand both the local and export market,” Mr. Hwenga added.

Pole sales volume was 29 percent lower than the comparative period in prior year, and this was mainly due to timing differences that are usually experienced in the acquisition of tenders, which is asymmetrical.

However, Border Timbers said improved performance is anticipated in the poles business due to expected demand for the product in Botswana, Zambia, and Malawi markets.

In their outlook, the company said, “Management remains focused on cost containment, closely managing operating expenditure and working capital positions in the most effective and efficient manner.”

Mr. Hwenga concluded that “Despite the increasingly complex trading environment, the company remains focused on producing a positive outcome by driving volumes and ensuring that pricing remains competitive.”-ebusinessweekly