York Timber reports loss after strikes hurt sales
The forestry company says it imported plywood to service local customers during the industrial action, while harvesting activity either stalled or was scaled back
York Timber Holdings says it slipped into a loss in the six months ended December as sales fell, partly due to employee strikes.
The forestry company, which owns plantations and mills, said on Monday it made a net loss of R65m in the interim period, from a profit of R84m a year before. Revenue fell 11% to R800m, it said.
York said it had imported plywood to service local customers during the strike, while harvesting activity either stalled or was scaled back. “These operations are scheduled to normalise over the remainder of the financial year,” it said.
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The National Union of Metalworkers of SA (Numsa) was recognised as the majority union at the company during the period.
York said the minimum wage rate was increased for forestry contractors, and this contributed to higher administrative expenses.
Further, “security costs increased abnormally due to additional strike response units being employed to safeguard the company’s assets”, it said.
Meanwhile, York said the value of its biological assets fell 1%, mostly due to the delayed start to the planting season following late rains.
“Subsequent to the reporting period, good rains have fallen and planting targets will be met for the 2019 financial year.”
The group said it was restructuring underperforming divisions and was “aligning the human resources division with the operations to effectively and speedily address employees’ matters”.
“In the absence of a significant improvement in economic growth, the SA market will most likely remain subdued.
“The lumber demand for the major product category that York produces remains firm and the export of plywood will continue contributing towards earnings.”