BORDER Timbers Limited after-tax profit slumped to $1,2 million for the year ended June 2013 due to a decline in revenue.
Last year the company recorded an after-tax profit of $1,8 million.
In a statement accompanying the group’s audited financial results, Border Timbers Limited chairperson Kenneth Schofield said the group’s revenue declined by 14 % to $24 million due to the closure of the veneer mill at Paulington factory which are expected to enhance profitability going forward.
In the period under review, revenue for doors was 7% lower than the prior year and rough swan timber was 10% down owing to reduced production.
Schofield said the average selling prices were weaker as a result of a higher proportion of export sales and this disadvantage was, however, partially offset by a shorter payment cycle.
He said strong performances were recorded for poles and mouldings which surpassed prior year results by 4% and 2% 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.
He said the finance cost was up 49% to $2,8 million and this was a reflection of the level of borrowing for the group.
“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.”
Schofied said the performance for Boarder Timber International which specialises in solid doors, shelving and mouldings had a total production output of 6 206 square metres which was down 14% in the prior year, primarily as a result of low demand.
Pauline factory total volume output was at 5 849 square metres, down 39% from prior year.