LIVINGSTONE MARUFU
Timber producer, Border Timbers swung to a profit position of ZWL$70.5m in the quarter to September 30, 2020, from a loss of ZWL$88.5m recorded in the prior comparative period buoyed by an improved demand in lumber timber.
The company’s judicial manager, Peter Bailey said management continues to do “an excellent job in difficult circumstances”.
“Demand for lumber remains very high both in the local market and the export market, hence significant positive movement is expected as the economies return to normalcy,” Bailey said.
Revenues for Border Timbers, which was placed under judicial management in 2015, however, declined 16% to ZWL$313,1m in the reviewed period from ZWL$371.8m recorded in prior comparative period owing to the Covid-19 lockdown restrictions which disrupted production and logistics.
Bailey said the measures put in place by governments in Southern Africa to curb the spread of the virus affected regional export markets, business’ supply chains, resulting in reduction in aggregate demand and logistical bottlenecks.
Total production, according to Bailey, was down 80% to 13,668 during the quarter from 17,986 in the comparative prior period while the total production for the whole year was 62,317 this year from 68,896 last year.
Though the company’s revenue was 16% down , the total revenue for 12 months was 48% up to ZWL$ 822,6m this year from ZWL$556,7m in 2019.
Bailey said treated poles reflect a decline in production and sales volume compared to prior year; this was because of lower demand during Q1 of FY20 and the adverse effect of the Covid-19.
He said the company will continue to be under judicial management as no finalisation has yet been reached from ongoing discussions with the other part to the claim.
He said discussions with the government will follow and accordingly, the company will remain under judicial management for the foreseeable future.
He, however, said 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.
There has been an improvement in the inflationary pressure in the economy with the annual inflation rate dropping.
Going forward, the company expects the Covid-19 pandemic not to have a material adverse effect on Zimbabwe and other countries in the region in the foreseeable future.
Though it remains uncertain as to when the pandemic will go away, the lockdown restrictions are being eased and the local and regional economies are already showing signs of recovery.
The company will be guided by the pronouncements from the World Health Organisation and the Ministry of Health and Child Care for measures that protect its staff and stakeholders, Bailey said.
