66 INTEGRATED ANNUAL REPORT 2025 After several years of strange and unusual challenges, the 2025 financial year has not disappointed in following the trend. Aside from the continuing challenges arising from the 2023 fire in Richards Bay, Durban also had its share of challenges with an unfortunate series of events resulting in the port loader being out of operation for a few months early in the year. As a result of not being able to take timber into any of our three NCT group mills for several months of the year, volumes purchased were at a level last seen in 2013 when a depressed Japanese economy with reduced local demand for pulp and paper products amongst other factors resulted in reduced exports of wood chips. Northern Eucalyptus growers were given access into Richards Bay at the beginning of the year for biomass chipping with the mobile chipper. This has resulted in the purchase tonnes table indicating significant increases in biomass purchased, but this should be combined with the Eucalyptus pulpwood for purposes of comparison with prior years. Total purchased tonnes were almost 20% more than tonnes sold as the mills began to build up stock levels again. For the first time in many years, the exchange rate was relatively similar to the prior year with an average rate Chief Financial Officer’s Report 2025 KERRY MOFFETT achieved on receipts of R18.50:USD compared to R18.68:USD the prior year. In addition, the range achieved was smaller over similar rates of exchange. This put pressure on the mill delivered price (MDP) after a significant dollar price decrease in January 2024 as the export dollar price combined with the exchange rate and mix of customers plays a large role in determining MDPs that can be paid for timber. Turnover was also a casualty of the lower export volumes, dollar price decrease, and exchange rate. While turnover from local sales remained relatively stable at just under R0.5 billion, export turnover reduced by 43% from the prior year to R1.4 billion. We held Eucalyptus prices until August 2024 and Acacia prices until November 2024 before reducing them to balance the variables in the MDP calculation and preserve our cash reserves. Insurance proceeds for both Richards Bay mills were received through the year, with the final payment for each mill outstanding at year end. Durban mill was also the recipient of a business interruption insurance payout from our new insurer after the loader damage at the port. Total insurance proceeds for the Group
RkJQdWJsaXNoZXIy MjgyNjA0