TIDMWBI
RNS Number : 9266R
Woodbois Limited
11 July 2022
11 July 2022
Woodbois Limited
("Woodbois", the "Group" or the "Company")
Q2 2022 update
Highlights
-- H1 2022 revenue up 38% to $11.3m vs H1 2021 $8.2m
-- H1 2022 Group gross profit margin improved to 23% from 20% in H1 2021
-- Cash balance $2.1m as at 30 June 2022
-- Period end working capital(1) of $9.8m of which inventory was
$6.4m and excluding short and longer-term bank and other loans of
$12.4m
-- Sawmill production: 9,565m3 (+37% versus H1 2021)
-- Veneer production: 2,740m3 (+50% versus H1 2021)
-- Best quarter and half-year for volume of product shipped since before the pandemic
-- 2022 on track to deliver strong revenue and profit growth
Further substantial output increases in H1
The production teams in Mouila, Gabon have delivered further
operational progress during Q2 2022, with veneer output increasing
by 50% from H1 2021 and a corresponding increase of 37% achieved in
sawn timber. The logistics team continued to deliver despite the
challenges of regular ship re-scheduling, exporting almost 100%
more containers during Q2 2022 than the quarterly average achieved
during 2021, albeit this will not be fully reflected in revenues
until Q3 under accounting rules.
Financial
Through economies of scale and a focus on higher margins sales
the Group increased its gross profit margins to 23% compared with
20% in FY 2021. The management team in Mouila, Gabon, continued to
carefully manage the acceleration of production levels, keeping it
in line with the volumes of product shipped to customers, in order
to prevent large-scale inventory build-ups and to facilitate a
consistent cash conversion cycle.
Total borrowings increased marginally from $12.1m at the end of
Q1 to $12.4m at the end of Q2 reflecting the Company drawing $1m of
the $2m Lombard Odier short-term facility, full details of which
were announced on 13 January 2022, and paying down approximately
$0.7m of bank loans and equipment lease obligations during the
period.
Operational
The update of 19 April 2022 noted that in spite of the strong
levels of increased output in Q1 2022 there was still additional
capacity at both our sawmill and veneer factory to be capitalised
upon. An increasing part this additional capacity started to become
utilised in Q2 2022 with production in the quarter increasing by
49% at the veneer factory and by 28% at the sawmill. These
increases were carefully calibrated with shipments and were
achieved against a backdrop of relatively steady sales prices. The
total number of containers shipped in Q2 2022 increased by 24% over
Q1 2022 and will only fully convert into Revenue in Q3 given the
delay between physical shipping and revenue recognition. In common
with some other African countries Gabon has been experiencing both
much higher fuel costs and periodic shortages, although to-date the
Group's operations have not been materially affected.
The second veneer line being installed at our factory in Mouila
is currently undergoing final testing and is expected to be
operational this month. This will generate additional higher value
product and represents another significant milestone of
achievement. We expect the output to deliver a rapid and high level
return on investment with the new line set to more than double
existing capacity to approximately 15,000m(3) of veneer per
year.
Work on FSC certification has continued and is now over 60%
complete and we aim for completion during 2023.
The Group continuously monitors exposure to customers in
countries that are starting to experience an inflation-driven
slowdown or import controls. We are pleased to note that pricing
and demand for our high-quality products currently remains robust,
particularly from the Middle East and growth economies of North
Africa. The Group does not have suppliers or customers in Russia or
Ukraine.
CEO Paul Dolan commented:
"All stakeholders should be delighted by the strong momentum
generated in the first half. The substantial production gains
recorded reflect the capital investment made to date and affirm
decisions taken to enhance the Gabon in-country leadership team and
to focus on optimising delivery against our expansion plans. Whilst
there are many challenges ahead, the next step in our journey to
scale the business is the full commissioning of our second veneer
line in Mouila, Gabon, which we expect to contribute to a further
increase in revenues, margins and profitability."
Enquiries:
Woodbois Limited +44 (0)20 7099 1940
Paul Dolan - Chief Executive Officer
Carnel Geddes - Chief Financial Officer
Canaccord Genuity, Nominated Advisor +44 (0)20 7523 8000
Henry Fitzgerald-O'Connor
James Asensio
Gordon Hamilton
(1) Working Capital is a non-IFRS measure and consists of Cash,
plus Inventory, plus Receivables, less Payables.
Background on Woodbois
Woodbois Limited (AIM:WBI) is an African-focused forestry
company, divided into three distinct, but highly complementary
divisions comprising the production and supply of sustainable
African hardwood products, the trading of hardwood and hardwood
products, and a reforestation and carbon credit division.
Woodbois' forestry division has production facilities in Gabon
and Mozambique, managing a total of c470,000 hectares of natural
forest concessions. The trading division comprises a highly
experienced team of timber specialists, who source and supply
sustainable timber to a global customer base. Its proprietary
technology developed in-house, captures, stores and presents data,
providing a matching engine to build scale and optimise trading
opportunities with its global customer base.
The Company's carbon sequestration and trading division was
formed in March 2021 and aims to generate voluntary carbon credits
for corporate partners through the delivery of large-scale
reforestation projects.
The Company's focus on the transparency and sustainability of
its timber operations has been recognised by The Zoological Society
of London, which ranked Woodbois joint sixth in its Sustainability
Policy Transparency Toolkit ('SPOTT") ESG policy transparency
assessments for the worldwide timber and pulp industries for
2021.
Please follow the Company on Twitter: @WoodboisLtd
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