York Timber suffers from price gouging by state-owned Safcol
York Timber is suffering from price gouging by state-owned enterprise South African Forestry Company Limited (Safcol), the lumber mill operator complained in its results for the year to end-June, released on Tuesday.
"Raw material supply was repeatedly interrupted due to excessive price increases," York Timber said. "York is endeavouring to resolve this marketing policy dispute with Safcol, as we consider a 17% annual price increase on logs unreasonable."
Revenue grew 3.5% to R1.8bn while after-tax profit jumped 54% to R367m. The group has not paid a dividend since 2005.
York said its net asset value per share grew 17% to R9.43, meaning its share, which last traded at R2.50, is at nearly a quarter of its book value.
The group said it is looking to expand its forestry operations outside SA and hopes to enter the electricity market, but this plan has been snarled by the government’s confused policy about breaking Eskom’s monopoly.
"It is unfortunate that there has been no announcement for the preferred bidder of the renewable energy, independent power-producer procurement programme submitted under the expedited 4b window," the results statement said. "York is exploring alternative options to participate in the energy market as this remains a very viable revenue stream."