Border Timbers revenue up 11%
TIMBER and sawmilling company Border Timbers Limited has recorded a revenue increase of 11% to ZW$4.79 billion for the year ended June 2022 compared to ZW$4.32 billion recorded in the prior year in inflation-adjusted terms.
Company chairperson Elias Hwenga said the revenue growth was primarily driven by consistent product quality of kiln-dried timber, which resulted in better average selling price.
The inflation-adjusted cash generation from operating activities was ZW$1.05 billion (full-year 2021: ZW$942 million), a 12% increase from the prior year.
Among them was the harvesting operations, which performed well with the plant optimisation broadly on plan.
Hwenga said the outsourcing strategy on harvesting continues to stabilise the sawmills log supply, leading to high plant capacity utilisation.
“All logs supplied to the processing plants were from the company’s own plantations with no external logs purchased.”
The company also benefits from outsourced silviculture operations that brought about more cohesive and efficient plantation management processes.
During the period under review, there was a significant improvement as 713 hectares were planted, compared to 341 hectares planted in the prior year.
“The company is focusing more on improving the Biological Asset, applying best practices, and improving planting methods,” said the company.
However, operating expenses grew by 85% due to the inflationary pressures experienced in 2022.
Lumber production volume and sales volume declined from 45 871 square metres to 43 930 square metres and 49 047 to 43 120 square metres respectively. This was caused by lower aggregate demand, primarily in the local market.
Hwenga added that arson remains a major risk in the business. During the year under review, the company lost 235 hectares to plantation fire damage, which was significant compared to 27 hectares lost in the previous period.
“As a result, the company has further strengthened its plantation patrol teams, community engagement programmes and acquired new firefighting equipment,” he said.
Treated poles sales volume was 10 169 square metres (full-year 2021: 9 464 square metres), a 7.4% improvement from the prior year.
“Market development remains the key focus of our pole business as the company is actively pursuing new opportunities in the local market as well as in the region and beyond,” added Hwenga.
Hwenga said the company is in the process of recapitalising its two sawmills with the latest milling technology and commissioning of the new machinery by the end of full-year 2023.