Photo by: Creamer Media
Following a “disappointing” 2022 financial year, lumber and agriculture company York Timbers has again reported year-on-year decreases in several key metrics for the 2023 financial year ended June 30.
The company’s loss for the year amounted to R393-million, compared with a profit of R182-million in the prior year.
Earnings a share of 53c in the prior year swung to a loss a share of 77c in the reporting year.
Adjusted earnings before interest, taxes, depreciation and amortisation – including adjustment for impairments and fair value on biological assets – decreased by R161-million in the year under review.
Core earnings a share decreased from 34c to a loss of 8c apiece, while net asset value a share decreased from 857c to 579c.
The board has resolved to not declare a dividend for the year under review.
York Timbers has two sawmilling operations in Sabie and Warburton, in Mpumalanga, as well as a plywood plant in Sabie.
The group grows pine and eucalyptus trees, with a fleet solutions division that owns heavy motor vehicles that are used to transport logs.
Moreover, the group has five distribution centres located in Germiston, Polokwane, Gqeberha, Durban and Cape Town that sell timber products from the various operations.
On the agricultural side, York Timbers owns land with avocados, citrus and macadamia orchards, as well as a fruit packing facility.
DEBT ARRANGEMENTS
The increase in interest rates and related higher interest expenses continues to put pressure on the group’s covenants under both its Absa and Land Bank facility agreements.
York Timbers has proactively engaged with both banks and received a condonement from Absa for the expected September 30 breach.
Based on current forecasts and current ratio parameters, the December 31, 2023, interest and leverage covenants are expected to be breached as well.
The group assures shareholders that it has sufficient funds available to settle the Absa debt, should it become payable in January 2024; however, this is unlikely based on indications from the bank.
In turn, the Land Bank facility provides a remedy to cure a breach within 20 days of notifying the bank of a potential breach, which York Timbers has done. In respect of the September 20, 2023, measurement period, the company is not in default.
In respect of the company’s R250-million rights offer in December 2022, R158-million of the funds were invested in a short-term fixed deposit and available to the group as at year-end.
The directors believe the group has adequate financial resources to continue in operation for the foreseeable future and, accordingly, the audited consolidated and separate annual financial statements have been prepared on a going concern basis.
The directors have satisfied themselves that the group is in a sound financial position and that it has access to sufficient borrowing facilities to meet its foreseeable cash requirements.
The directors are not aware of any new material changes that may adversely impact the group. The directors are also not aware of any material noncompliance with statutory or regulatory requirements or of any pending changes to legislation which may affect the group.