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York Timber operations squeezed by erratic log supply

York Timber operations squeezed by erratic log supply

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York Timber Holdings’ headline earnings per fell sharply to 9 cents in the 12 months to June 30, from 40 cents a year before after heavy rainfall affected its operations.

Directors said in the results yesterday they had to temporarily close down all operations at its sawmill in Graskop during the year due to the sawmill being dependent on South African Forestry Company (Safcol) for log supply.

Volumes awarded by Safcol were significantly less than bid volumes.

With no raw material security, a decision was made to temporarily close down the operation.

The inconsistent log supply to York’s mills was, in the 2021 annual report, already identified as the top risk that the company might face, as Safcol had been failing to meet contractual obligations due to operational capacity constraints.

York’s directors said the results were also impacted by heavy rainfall and industrial action resulting in the disruption of operations commencing on April 25, 2022 through to June 2022. Total comprehensive income was much lower at R30.5m from R138.5m last year.

The company – the Industrial Development Corporation is the biggest shareholder with a 28.72 percent stake – sources most of its income mainly from four operational segments: sawmill and plywood plants, forestry and fleet, timber-related wholesale, and avocado, citrus and macadamia agricultural operations.

Revenue was 5% lower at R1 839m. Earnings before interest, taxation, depreciation, amortisation and fair value adjustment on biological assets decreased by R104m.

Debt reduced by R133m. Total borrowings stood at R413.44m by year end. Gearing fell slightly to 14% from 15%. Cash generated decreased from R425m to R202m. The biological asset value was down by 2%.

Net asset value per share rose to 952 cents from 950 cents.

The share price was untraded at R2.53 yesterday morning, 27.7% below that R3.50 it traded at a year ago, but well up from R1.61 that it traded at three years ago.



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