AFTER exiting judicial management, listed timber milling and manufacturing firm, Border Timbers Limited, says it is now focused on raising funds to recapitalise its operations.
The company was placed under voluntary provisional judicial management in 2015 and final judicial management in 2016.
Following approval by the shareholders at the extraordinary general meeting held in January 2022, and the subsequent approval by the High Court on March 14, 2022, the company exited judicial management.
In a statement accompanying the financial statements for the year ended June 30, 2022, chairperson Elias Hwenga said recapitalisation remained one of their key priorities.
“Recapitalisation remains a key priority with our replanting programme already on course to reduce the unplanted area to industry standard of 5% in the next three years. The company is in the process of recapitalising its two sawmills with the latest milling technology and commissioning of the new machinery is expected by the end of FY2023,” he said.
The firm reported an 11% increase in revenue to $4,79 billion compared to $4,32 billion achieved prior year attributable to consistent product quality of its kiln dried timber, which resulted in good average selling prices.
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Inflation-adjusted cash generated from operating activities stood at $1,05 billion against $942 million reported in the comparable period.
In forestry, lumber production volume went down by 4% to 43 930m3 from 45 871m3 due to low customer demand during the period.
During the period under review, a total of 731 hectares were planted, an improvement from the prior year comparable period as the company shifted its focus on improving biological assets, applying best practices and improving planting methods.
Treated pole sales volume increased by 7,4% to 10 169m3 from 9 464m3 recorded in the previous year.
According to Hwenga, market development remains a key focus of pole business as the company is pursuing new opportunities in the local market and the region.
“Improved performance is anticipated in the poles business due to increased demand for the product in the Sadc region where rural electrification projects and infrastructure developmental projects are attracting financial support. We forecast pole sales performance to be bolstered by Mozambique, Botswana, Zambia as well as the local market,” he said.
However, Hwenga pointed out that plantation fire damage remains a major risk facing the business as the company lost 235 hectares, adding that the company has since strengthened its patrol teams and acquired new firefighting equipment.
He said the board remained committed to its strategy of delivering value for all stakeholders.
“We believe that the fundamentals in the business remain intact, with healthy forests, a talented and experienced management team, and workforce to support the strategy. The company’s product quality remains highly regarded in the market and the current marketing efforts will increase demand for the company’s kiln dried timber,” Hwenga said.
The good performance led to the reinstatement of the board which took over from the judicial manager.