TIDMWBI
RNS Number : 3204L
Woodbois Limited
12 January 2021
12 January 2021
Woodbois Limited
("Woodbois", the "Group" or the "Company")
Q4 2020 Update
Woodbois, the African focused sustainable forestry and timber
trading company, is pleased to announce its Q4 trading update for
the period 30 September 2020 to 31 December 2020.
Highlights
Financial (unaudited)
-- Revised revenue target of $15.0 million for 2020 achieved (2019:$19.5 million)
-- Q4 revenue of $3.2 million, consistent with Q3 (Q4 2019: $5.6 million)
-- Funded to achieve near term growth objectives with a cash
balance of $2.5 million, as at 31 December 2020
-- Working capital at 31 December 2020 of c$9 million; interest
bearing debt of c$6.1 million at an average rate of 5%
-- Underlying profitability ahead of expectation prior to any write-down of inventory
Operational
-- Q4 Sawn timber production 2,030 m(3) (19% increase on Q1-Q3 2020 quarterly average)
-- Q4 Veneer production 569 m(3) (6% increase on Q1-Q3 2020 quarterly average)
-- Previously announced worldwide freight container constraints
due to COVID-19 limited Q4 shipments
-- The Primultini sawmill line has arrived in Gabon and is on
track to be operational around the end of Q1 2021 with foundations
to support the 13-ton bandsaw nearing completion
-- The new sawmill line will enable the Company to significantly
increase sawn timber production, and its commencement will be a
major step towards the Company becoming cash flow positive
-- Achieved first sale of Woodbois sawn product into the USA,
the world's second largest importer of hardwood and a key target
market for Woodbois in 2021
-- The Company's turnaround strategy in Mozambique continues,
with business reset to provide contribution in 2021
-- Woodbois continues to investigate the best option for the
purchase and installation of a second veneer line in Mouila, Gabon.
Travel restrictions in place due to the COVID-19 pandemic have
hampered the Company's ability to inspect machinery, but further
updates will be provided in due course
Inventory Theft in the Ivory Coast (non-core) Under
Investigation
-- $2m of trading inventory discovered stolen from third party
warehouse in Ivory Coast post period end. Company and police
investigating; the Company intends to maximise recovery
-- Sales from the Ivory Coast accounted for c6% of the Group's
unaudited 2020 turnover. No impact on principal operations in key
production business in Gabon
Key Hires
-- Further strengthening of the operating team during Q4 2020:
o Jake Slocombe (Head of Sales: UK and USA), and Rémy Cazeaux
(Production Director) joined in Q4, adding significant strength to
the trading and production teams respectively
o Olivier Normand will join as Head of Performance Management in
mid-January 2021, having made a positive impact when he spent two
weeks at the Company's factories in Mouila in December 2020.
Olivier has a Master's degree in aerospace engineering, is a Master
in continuous improvement and Lean 6 sigma and has over 30 years'
experience managing, optimizing and coaching performance
improvement through the application of Standardization and Lean
manufacturing techniques. Olivier will report directly to the CEO
and to the Gabon Country Head
FSC Certification
-- During Q4 2020, the Company engaged with the Programme for
the Endorsement of Forest Certification ("PEFC"), a leading global
alliance of national forest certification systems, as progress is
made towards FSC certification. PEFC is a programme, sponsored by
COMIFAC (The Central African Forest Commission) and KfW (the German
state-owned development bank) tasked with offering third party
certification support to forestry companies in the Congo-basin
-- Due to COVID-19 related disruption during Q4, the initial
diagnostic mission to Woodbois' operations in Gabon by PEFC has
been delayed to Q1 2021. Third party certification is a priority
for Woodbois and the Company is seeking to hire an in-country ESG
professional to lead this process in 2021
Outlook
-- Woodbois expects to turn cashflow positive, deliver
profitability and generate significant revenue growth in 2021
-- Whilst the business remains firmly on a growth trajectory,
some continued impact from the pandemic should clearly be expected.
One consequence has been a delay in securing the purchase of a
second veneer line, now budgeted to be operational by the end of
2021. Consequently, because of this and current COVID-19 impacts
revenues in 2021 are currently expected to be in the range of $25
million to $30 million, with the revenue target for 2022 of more
than $60 million remaining unchanged
-- Sustainable forest management and reforestation remains a
fundamental part of the Company's strategy. Woodbois continues to
assess new practices and commercial avenues that will enable it to
minimise and utilise any waste and thus take advantage of
associated circular economy benefits
-- If Ivory Coast stock is not recovered, capital for the
trading business in the immediate future will be proportionally
reduced
-- To assist with the Company's growth strategy, further
high-impact hires are expected to be made over the coming
months
Shareholder engagement
Woodbois hosted an investor presentation in December 2020 and
plans to host other investor events over the course of 2021.
Further details of which will be provided in due course.
Commenting on today's announcement, Executive Chairman and CEO
Paul Dolan said:
"Despite the backdrop, I am very pleased with the Company's
performance during 2020. Following the transformational balance
sheet restructuring completed in August and its subsequent
financial benefits, we have given ourselves a strong platform to
build on and we intend to deliver significant growth in 2021. We
remain well financed and our further strengthening of the
operational team during Q4 and in 2021 means that we are well
placed to capture the opportunities and build shareholder
value.
Whilst recently being victims of a theft in Ivory Coast is
highly disconcerting, we believe this to have been an isolated and
opportunist incident. It does not directly impact the vast majority
of the business, consisting primarily of our own forestry
concessions and production in Gabon and other third party trading,
and we continue to expect to be increasingly profitable from 2021
onwards.
The demand for sustainably sourced timber continues to grow and
we believe that our current footprint in Africa, the investment in
equipment, processes and industry leading staff, combine to ensure
we are uniquely well placed to increase our market share in global
sales and trading.
The Board remains confident of Woodbois' ability to meet its
objective of profitably becoming one of the leaders of the
sustainable African hardwood sector. We look forward to keeping all
of our stakeholders updated on developments over the coming months
and to announcing our detailed 2020 Results at the end of
April."
Enquiries:
Woodbois Limited
Paul Dolan - Chairman and CEO + 44 (0)20 7099 1940
Canaccord Genuity, Nominated
Advisor
Henry Fitzgerald-O'Connor
James Asensio
Thomas Diehl + 44 (0)20 7523 8000
Celicourt Communications (IR/PR) +44 (0)20 8434 2643
Mark Antelme woodbois@celicourt.uk
Jimmy Lea
Background on Woodbois
Woodbois Limited (AIM:WBI) is an African focused forestry and
timber trading company, which produces, processes, manufactures and
distributes sustainable African hardwoods and hardwood products to
customers around the world.
Woodbois' forestry division has production facilities in Gabon
and Mozambique, managing a total of c400,000 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.
Sustainability is at the heart of the business, with a clear
focus on maintaining the transparency and sustainability of its
timber operations. This has been recognised by The Zoological
Society of London, which ranked Woodbois third in its
Sustainability Policy Transparency Toolkit ('SPOTT") ESG policy
transparency assessments for the worldwide timber and pulp
industries for 2020.
Please follow the Company on Twitter: @WoodboisLtd
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