Timber milling and manufacturing firm,
Judicial manager
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
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
"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
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
Revenue for the period was at
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.
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