Published: 20 November 2013

Border Timbers' Deputy Chairman Heinrich von Pezold told the AGM this morning that Border is exporting product to regional markets to sidestep the effects of problems in its most profitable market, Zimbabwe.

He said the company's Q1 performance was tough because of low liquidity in the Zimbabwean market as well as cost headwinds.

He added that they experienced unsustainable wage demands from union and they have responded by reducing labour force.

The high cost and the poor availability of electricity were also cited as challenges to the operations and Pezold cited a month where the company lost 11 days of production because of power problems.

He said the company has engaged in a restructuring plan which will make it more profitable and cash generative.

"The various initiatives will have full effect in Q1 of the next calendar year," he said.

He also noted that they are seeing strong demand regionally in pole business and is working on reducing the debt this year.

Responding to a shareholder questions about low return on equity and sluggish stock market performance he said a large portion of the company’s balance sheet is under arbitration saying land related assets may not achieve fair valuation until there is clarity on tenure.

He cautioned shareholders the situation is unlikely to change in the foreseeable future although the company has been actively engaging authorities to address the issue.

The meeting approved director’s fees of $25 500 (F12:$14 500) and audit fees of $28 308 vs $39 367 last year.
- zfn

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