BORDER Timbers Limited has narrowed its loss making position to $2,59 million for the year ended June 30 2017 on the back of cost containment measures.
BY TATIRA ZWINOIRA
In the same period last year, the company posted a loss of $24,3 million.
Border Timbers judicial manager Peter Bailey said absent the non-cash fire loss, the company would have experienced a net profit after tax of $3,74 million for the period under review.
“Other income decreased by 50% from $6,4 million in FY16 to $3,2 million, this was mainly due to a decrease in exports which resulted in lower freight recoveries. Selling and distribution expenses were down 62% from the FY16 (financial year 2016) reflecting the reduced sales volumes and success in some cost containment measures,” he said.
“Turnover for the period decreased by 27% from the prior year this was as a result of reduced mill intake volumes in line with sustainable forestry management strategies coupled with the slow start in contracted orders on the poles.”
To that effect, revenue was down to $14,97 million for the period under review from a 2016 comparative of $20,49 million.
Cash and cash equivalents at the end of period under review improved by 6,55%, showing the company’s liquidity position was healthy.
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In terms of profitability, Border Timbers spent $1,17 for every dollar in revenue which was a marked improvement from the 2016 loss making position, where the company was spending $2,18 for every dollar in revenue.
The company will have to continue its return to more profitable levels as its income tax credit reduced by 56,77% to $3,26 million from $7,54 million recorded over the 2016 comparative showing the company will not be able to rely on income tax savings going forward.
While the biggest cost containment measure was on selling and distribution expenses, the company saved 5,25% on administration expenses to $3,43 million from a 2016 comparative of $3,62 million.
However, Border Timbers will have to look closely at their other operating expenses which grew 105,87% to $658 465 from the 2016 comparative of $319 841.
In terms of business, exports were down 56,77% showing the company’s outside market shrank while it grew its local business by 57,93% as the local market grew its confidence in the company.
Total assets declined by 4,8% to $116,53 million from $122,42 million recorded over the same period in 2016 on the back of declines in property, plant, equipment, biological assets, and trade and other receivables.
However, Bailey remained positive on its regional footprint and even well beyond the region.
“Subdued economic conditions are expected to prevail. However, demand for the company’s quality products remains strong in the region and beyond.
Concerted efforts on market diversification are under way so as to exploit opportunities which give best returns,” he said.
Border Timbers was early last year placed under judicial management after failing to service debts worth $20 million to several financial institutions.
