Timber milling and manufacturing firm, Border Timbers Limited, is eyeing growth in export markets, at a time foreign currency availability in the country remains limited.
Judicial manager Peter Bailey, indicated the firm was looking at increasing sales volumes across the country’s borders.
This comes as demand for lumber remains very high both in the local market and the export market although treated poles reflect a decline in production and sales volume compared to prior year, due to lower demand during Q2 of FY21 and the adverse effect of the Covid-19.
“However, measures are in place to further develop the export market with a view of increasing sales volumes,” he said in a trading update for the half year to December 31, 2020.
But Covid 19 induced lockdown restrictions had an adverse effect on production coupled with logistical bottlenecks caused by the pandemic in the first quarter of the financial year.
However, Bailey acknowledged the improvements to the business environment due to factors such as exchange rate stability following the re-introduction of the foreign currency auction system by the RBZ.
He added that: “The relaxation of Covid-19 lockdown restrictions, extension of trading hours and free movement of people improved the operating conditions and production of the business during the second quarter to December 2020.
“The Gazetting of Statutory Instrument 185 of 2020 during the half year under review, on dual pricing policy was extremely encouraging on the business front as it ensured flexible business pricing strategies which significantly improved value preservation.”
During the half year to December 31, 2020, total production volumes fell to 28 519 cubic meters from 34 414 cubic meters in the same period in 2019. Of this, lumber production accounted for 24076, a decline from 28 379 while transmission poles accounted for 4 443 cubic metres.
At 30 253 cubic metres, total sales volumes were 11 percent below prior year comparable period. Lumber sales volumes went down to 26 000 cubic metres from 27 706 while transmission poles were at 4 253 from 6 749 cubic metres.
Net profit before tax recovered to $58 million from a net loss before tax of $18 million.
Revenue for the period was at $629 million, a decline from $813 million during the same period in the prior year.
Going forward, Covid-19 pandemic is expected to continue causing logistics disruptions. But the company “remains cautiously optimistic about the current financial year with focus placed at replacing obsolete equipment, which is expected to improve efficiency.”
Meanwhile, the company remains under judicial management.