Fires 'heat' Border Timbers

HARARE - Listed forestry group Border Timbers Limited (Border) says it has lost nearly 10 000 hectares of its plantations worth millions of dollars to fire since year 2 000.

The group reported that it lost 133 hectares in the full year to June 2013.

This comes as its revenue went down 14 percent to $24 million during the period under review, while every year, forest losses are costing the global economy between approximately $4,5 trillion in lost revenue, according to a global study by the Economics of Ecosystems and Biodiversity.

“Since 2000, the total loss to fires has been 9 917 hectares.

“While this season’s loss was lower than in recent years, we continue to point out that in the comparative decade prior to the arson effects since 2000, average loss was 17 hectares,” said the group’s chairperson Kenneth Schofield.

He further pointed out that after the reporting date, the group subsequently lost about 441 hectares of plantation to fires at one to the estates.

Schofield however said the group will continue to engage relevant authorities with a view of ensuring fires are further reduced.

Over the years, Border has fought hard-to-win battles against arson fires.

This comes as the group’s after-tax profit slumped to $1, 2 million for the year to June 2013 compared to $1,8 million in prior year period due to a decline in revenue.

Schofield said the group’s revenue declined due to the closure of its veneer mill at Paulington factory which is now expected to enhance profitability going forward.

Revenue for doors was seven percent lower than the prior year and rough sawn timber was 10 percent down owing to reduced production.

“Average selling prices were weaker as a result of a higher proportion of export sales; this disadvantage is, however, partially offset by a shorter payment cycle,” said Schofield.

He said strong performances were recorded for poles and mouldings which surpassed prior year results by four percent and two percent respectively.

“Continued cost containment remains the focus, and efforts are underway to align overheads to the size of operation.

“As a result, operating profits were better than last year despite the lower turnover,” Schofield said.

This comes as finance costs went up by 49 percent to $2,8 million from $1,9 million in same period last year and this was a reflection of the level of borrowing for the group.

Last year, the group acquired a five-year loan facility valued at $7 million from the German Development Bank.

“The full benefit of the securing of long term funding and its effect on the balance sheet will be felt in 2014,” he said.

“These borrowings have been incurred to fund the aggressive replanting regime, care and maintenance of the biological assets and also the recapitalisation of the key items of the plant and equipment.”

Schofield said the performance for Border Timber International which specialises in solid doors, shelving and mouldings had a total production output of 6 206 square metres which was down 14 percent in the prior year, primarily as a result of low demand.

The group’s Paulington factory total volume output was at 5 849 square metres, down 39 percent from prior year as a result of temporary suspension of operations.

Meanwhile, former majority shareholder Radar Holdings (Radar) who held a 51,24 percent stake in Border ceased to exist as the latter’s ordinary shares were distributed pro rata to the existing shareholders.

Radar incurred a loss from discontinued operations of $47 million representing the transfer of the value of Border from the holding company to individual shareholders.

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