TIMBER milling and manufacturing company, Border Timbers Limited, shifted from a loss-making position of $88,51 million in 2019 to post a profit before tax of $70,49 million for the three months to September 30, 2020.
The improved profitability was attributable to easing inflationary pressures.
Said Border Timbers judicial manager Mr Peter Bailey:
“The economic environment has been fairly stabilising since the introduction of the foreign currency auction system and this has seen some improvements in the macro-economic fundamentals.
“Generally, global economies experienced the devastating effects of Covid-19 pandemic, which resulted in lockdown measures that affected both our local and export markets.” However, the group’s numbers in other key areas remained depressed.
Border Timbers’ revenue for the quarter under review slipped to $313,14 million from $371,86 million in the same period last year, which management attributed to a dip in sales volumes to 16 707 cubic metres from 18 973 cubic metres in the prior comparative period.
Critically, production volumes went down by 24 percent to 13 668 cubic metres for the period under review from 17 986 cubic metres in the comparative 2019 period.
With regards to transmission poles and lumber, production volumes slumped to 2 130 and 11 539 cubic metres, from a 2019 comparative of 2 621 and 15 365 cubic metres, respectively. Mr Bailey is, however, optimistic that business will pick up going forward as demand is still high for the company’s products.
“Demand for lumber remains very high both in the local market and the export market, hence a significant positive movement is expected as the economies return to normalcy,” said the judicial manager. He is, however, less optimistic on the company coming out of judicial management.
“Discussions with the Government will follow. Accordingly, the company will remain under judicial management for the foreseeable future,” he said.
The company was placed under provisional judicial management in January 2015 and went into final judicial management in April 2016 after failing to service debts to several financial institutions.
Border Timbers’ exit from judicial management was anticipated this year, but mainly depending on the settlement of an on-going dispute with creditors over US$125 million awarded to the company by the International Centre for Settlement of Investment Disputes (ICSID).
Border Timbers had slipped into the red for the nine months to March 31, 2020, posting a loss of $878 000, from a healthy $3,45million profit in the prior comparable period, which the firm had attributed to a poor operating environment, exacerbated by the Covid-19pandemic.