BY SHAME MAKOSHORI ZIMBABWE Stock Exchange listed forestry products dealer, Border Timbers Limited (BTL) says it plans to break into the European markets after securing crucial rights to tap into the significantly regulated, but lucrative region.
Along with planned European forays, BTL would be injecting fresh capital to ship advanced technologies for replacing old sawmills and increasing efficiencies, finance director, Lysius Karimanzira said in a trading update for the third quarter ended March 31, 2022.
BTL is making its first steps to re-establish itself after stepping out of administration in March when the High Court lifted its seven year long judicial management.
In January 2015, BTL slipped into voluntary provisional judicial management as it faced viability problems which, at the time, left its 17 000-strong workforce edgy.
It was a difficult time not only for BTL, but several firms in the manufacturing industry, which were affected by foreign currency shortages and depressed growth.
Karimanzira said Imbeza Estates, one of BTL’s key assets, signed up for Forest Steward Council (FSC) certification during the period.
FSC enables businesses and consumers to make informed choices about forest products they buy and creates positive change in forest products markets.
FSC, with its robust system and balanced decision-making process, provides one of the most credible forest certification schemes, its website says.
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Karimanzira said plans were underway for BTL to secure certification of the rest of its plantations.
“For the furtherance of its forestry sustainability goals, the company managed to secure the FSC certification for Imbeza Estate.
This initiative ensures best forestry management practices under FSC, which gives the company access to European markets, which demand FSC certified products.
“With Imbeza Estate being FSC certified, it is expected that new markets will be opened, and plans are underway to get the other estates certified,” he added.
“The business is forecasting a positive trajectory and growth following its exit from judicial management in March 2022.
“During FY (financial year) 2023, old sawmilling equipment will be replaced with latest technology in order to increase production efficiency.”
BTL’s inflation adjusted revenue increased by 5% to $1,8 billion during the period, compared to $1,7 billion during the comparable period in 2021.
The firm reported a $1,2 billion loss before tax during the period, compared to a one hundred and sixteen million profit before tax previously.
However, it maintained a positive cash generation position.
“Inflation adjusted revenue for the nine months ending March 2022 grew by 5% compared to the same period the previous year,” Karimanzira said.
“This positive performance was driven by consistent quality of our kiln dried timber, which resulted in better average selling prices and improved customer demand.
“The inflation adjusted loss is mainly as a result of differential accounting treatment of biological asset gain by International Accounting Standards (IAS) 29 -financial reporting for hyperinflationary economies, which uses the balance sheet approach to account for biological gain as compared to historical accounting.
“The differential accounting results in a biological loss of $2,2 billion under IAS 29 as compared to $0,3 billion biological gain under historical accounting.”