BSW Timber, the Berwickshire sawmill business, has moved back into the profit, accounts newly filed at Companies House show.
The firm, which has seven sawmills in the UK and one in Latvia, defied challenging conditions brought by rising log prices and an uncertain marketplace to deliver a pre-tax profit of nearly £2.6 million for the year ended March 31, 2018, after making a £2.1m loss the year before.
The group which owns Tilhill Forestry - one of the UK's largest forestry firms - posted sales of £304m against £286.5m the previous year.
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Profit after tax was £2m against a loss the year before of £1.3m.
It said the current year will also create challenges "not least due to the political uncertainty" but new markets are being explored while there is "continuing recovery in UK demand".
The development of new products will be an area of investment this year.
Alan Milne, finance director, said: "We continue to invest in processing efficiency and new products in order to better serve existing and new markets.
"The directors regard the investment in research and development as integral to the continuing success of the business and ensuring we provide our customers with good quality innovative products and services."
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In its turnover breakdown, BSW had £17.1m worth of sales in the European Union last year, down from £17.8m the previous year .
Mr Milne also raised concerns over Brexit.
He said: "The key business risks affecting the company and group are considered to relate to exchange rate volatility, demand for sawn timber products and consistency of flow of raw material.
"Brexit will also have an impact, as yet known."
The highest paid director received aggregate emoluments of £406,000, against £363,000 the year before.
The number of employees in the group was down from 1,262 to 1,245.
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