Woodbois (WBI) , an Africa-focused forestry and timber trading company, issued a market update covering recent trading and operational progress.
Woodbois reported total orders of over 9,000 m3 of sawn timber across its existing clients in Libya, Iraq, and South Korea, covering the next 12 months. The orders are valued at c. US$4.5m, with the bulk expected to be shipped in H1 2025. These volumes and dynamic and management expects further orders over the course of 2025.
Additionally, WBI has open contracts for veneer whereby its customers will purchase WBI's entire expected production for the next 6 months of 6,600 m3, valued at c. US$4m.
In terms of shipping, WBI had 17 containers of timber at the port in Libreville, Gabon, scheduled for shipment 'in the coming days'. A further 55 containers are being prepared at the warehouse in Moulia, anticipated to be moved to port and shipped in Q1 2025.
Financially, WBI reported continuing organisational streamlining, which has so far resulted in significant cost savings without compromising production levels. Specifically, WBI reported a 46% reduction in salary costs in Gabon (where its core business is located) and 45% elsewhere, both over 2023 levels.
More good news for investors is that WBI announced 'significant progress' in transitioning clients to the new 'Cash for Documents' payment terms from traditional letters of credit. This shift positively impacts WBI's cashflow, ensuring more timely and efficient financial operations.
Guido Theuns, Executive Chair and CEO, commenting: "We are making progress in streamlining our operations and improving financial performance. By securing orders from known and reliable clients, enhancing payment terms, reducing costs, and taking proactive steps to maintain production during challenging conditions, we are building a stronger foundation for sustainable growth. I am proud of the team's efforts and remain confident in our ability to deliver value for our shareholders and clients."
In its most recent interim results for the 6 months to June 30, 2024, WBI reported a much improved EBITDAS of US$(0.6)m, down from a US($2.8)m loss in H1 2023. Gross profits more than tripled year-on-year to US$1.8m, up from US$0.5m in H1 2023. Working capital was also up to US$2.5m from US$9.0m LY, and group borrowing declined to US$4.1m from US$5.6m LY. WBI maintained a cash balance of $0.7m at the end of the period on June 30, 2024.
The positive performance in H1 indicated a successful turnaround, with the company well-positioned for continued growth. We expect even stronger full-year performance, driven by forecast improved revenue in H2 as well as continued progress on operational efficiency and cost control. Profitability should follow soon thereafter given the much narrowed loss in H1.
WBI shares rose 5% on today's announcement.
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