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Forest fires fell Border Timbers revenues

Business
Border Timbers will record a loss for the full year ended June 30 2016 due to large forest fires which affected 5 094 hectares in the first quarter of the year.

Border Timbers will record a loss for the full year ended June 30 2016 due to large forest fires which affected 5 094 hectares in the first quarter of the year.

BY TARISAI MANDIZHA

In a profit warning statement, judicial manager Peter Lewis Bailey said the revaluation and the effects of the fires would reflect negatively on the company’s profit position for the fiscal year 2016.

“This is a result of the largest forest fires which affected 5 094 hectares in the first quarter of the fiscal year and a reassessment of the current forest plantation quality. Changes in the biological asset of the company are reflected in the statement of comprehensive income, even though they are not a cash expense as required by international financial reporting standards,” the statement read in part.

Bailey said the turnaround initiatives, which were implemented before and during judicial management, have been successful and the company has been generating significant profits and positive cash flows since the beginning of the fiscal year 2016.

Last year, Bailey said major shareholders had expressed willingness to court new investors to raise capital to meet the business requirements.

He said the company had found lucrative markets for its products, which now act as leverage to its business success.

In a trading update for the four months to October 31, the firm said despite economic challenges, demand for poles and lumber remained strong locally and in the region.

During the period, the firm’s earnings before tax were positive compared to a loss in the same period in 2014.

The company has posted profits on monthly basis since July 2015.

BTL is a subsidiary of Rift Valley Corporation, which operates forestry and sawmilling divisions, with the former having a total of four estates which include Tilbury, Charter in Chimanimani area and Imbeza and Sheba located in Penhalonga, north of Mutare.