TIDMWBI
RNS Number : 5762O
Woodbois Limited
11 October 2021
11 October 2021
Woodbois Limited
("Woodbois", the "Group" or the "Company")
Q3 2021 update
Highlights
-- Increased Gabon forest interests by 75% through the
acquisition of 71,000 hectares bringing total forest under
sustainable management there to 166,000 hectares. Consideration was
US$1.5m, of which $0.9m was settled in cash and the remainder in
four quarterly payments commencing this month.
-- Highest 2021 quarterly production of both sawn timber and
veneer as well of containers shipped.
-- Q3 2021 revenues of $4.5 million vs $3.2 million for Q3 2020, an increase of 41%.
-- Revenues of $12.7 million for first 9 months of 2021 vs $11.8
million for same period in 2020, up 8%.
-- 2021 Group gross margin for first 9 months of 20% vs 8% for FY 2020.
-- Finance charge of $0.5 million for first 9 months of 2021 vs
$2.7 million in same period in 2020, a reduction of 81%.
-- Working capital of $10.2 million (including $2.8 million
cash) as at 30 September 2021, excluding bank loans of $8.8
million.
Operational
Gabon
-- Total sawn timber production 4,700m(3) in Q3 2021. On an
average daily m3 production basis, this is a 36% increase over H1
and 128% increase over the first 9 months of 2020.
-- Total veneer production 1,140m(3) in Q3 2021. On an average
daily m3 production basis a 24% increase over H1 and 85% increase
over the first 9 months of 2020.
-- The first of two additional veneer lines agreed to be
purchased in late April has been dismantled and trucked to the
Group's factory in Mouila where the construction works required to
house the new machine are progressing on schedule. This line is
expected to be online around the end of the year and to increase
productive veneer capacity for 2022 by 100%.
-- Following the Company's certification application on-site
analysis is being performed by appointed forestry certification
consultants: their report is due to be presented to both the
Company and to the Promotion of Certified Forest Exploitation
("PPECF") in Q4 2021.
-- Site visit and initial stage implementation of Pallitracks,
the leading digital forestry traceability and management platform
for West Africa, currently underway, with the full on-boarding to
follow.
Re-forestation and Carbon Credit Division
-- Members of the carbon team travelled to Gabon and spent the
second half of September assessing potential project sites and
planting strategies. This work will feed into a comprehensive
feasibility study being prepared in cooperation with an independent
consultant for submission to the Government of Gabon.
-- The Company continues to field enquiries from major
corporations interested in carbon offset services. It is
increasingly confident about the fast-growing market opportunity
linked to corporate decarbonisation and in its progression towards
establishing its first large-scale project in Gabon or elsewhere in
West Africa.
-- Woodbois is encouraged by new climate change legislation
adopted by the Gabonese Republic last month. The new law provides a
robust framework for monitoring national emissions, as well as
setting out guidelines for generating carbon revenues from emission
reduction schemes. These progressive steps taken by the Government
further strengthen Gabon's place as an attractive territory for
large scale reforestation. Woodbois is excited to continue
assessing opportunities to support Gabon in achieving a fair value
for their natural forest assets and related ecosystem services.
Senior Hires
-- The external search for an additional independent
non-executive director is reaching its conclusion and the Company
expects to make an announcement shortly. As part of this drive to
enhance its corporate governance the Company is also taking steps
to split the role of Chair and CEO.
-- Mr Kassem Mohssen arrived from Lebanon in July to manage the
civil engineering works that are required to provide foundations
for and house the two recently purchased 26 tonne veneer peelers
and associated boilers, cutters and drying ovens.
Outlook
-- Woodbois continues to observe strong global demand for sawn
timber and corresponding price support for products, the benefits
of which are currently being partially offset by the elevated cost
of shipping.
-- The general level of container availability and shipping
somewhat improved to its highest level in Q3, and the Company
believes it is prudent to expect a modest upward change to the
situation during the remainder of 2021. Woodbois continues to
expect a step-change in the pace of revenue growth when the
shipping industry returns to a worldwide equilibrium, which is
anticipated during 2022.
-- Woodbois' operations performed in line with expectations
during Q3 2021. The Company's objectives to turn operationally cash
flow positive within Q4 and to record its first ever EBITDAS this
year remains on track, subject to operating conditions, most
specifically container and shipping availability as well as any new
Covid-related restrictions.
-- Conditions in Mozambique remain uncertain, and the Group is
reviewing its strategy and plans there for 2022.
-- In the run-up to COP26, Gabon will likely continue to receive
acknowledgement for the leadership it has demonstrated in forest
management through extensive media attention. The elevation of the
country's profile can only be a positive factor for future
forestry-linked carbon-related transactions.
Chair and CEO, Paul Dolan, said "Having delivered further gains
in output in Q3, and with increased veneer capacity due to come
on-line early in 2022, the over-riding focus remains on driving
returns on the significant investment made in our operations. As
operational cash-flow turns positive, the logical next-step is to
evaluate the multiple incremental opportunities that exist within
our fragmented marketplace. We are actively seeking to bolster our
leadership team to help us perform such evaluations, as well as to
ensure that we continue to deliver on our internal growth
strategy.
To have increased revenues over the previous quarter, given the
backdrop of continuing difficult conditions in the shipping sector
speaks volumes about the perseverance and adaptability of the
logistics team. Their relentless efforts to secure containers and
shipping births allowed us to deliver more product than in the
previous quarter and to help us manage our working capital
effectively. Their efforts are recognized and appreciated
throughout the Group and are highly valued by our customers.
The major carbon markets have continued to attract increased
attention from investors and organisations looking to service
internal climate goals and gain valuable exposure to carbon price
movements. Increased interest has driven the main compliance
markets to new all-time highs, reflecting strong fundamentals and a
positive market outlook. Even more encouraging for Woodbois is the
growth in the Voluntary Carbon Market. Recent analysis reported
that trading volumes for the first eight months of the year were
27% higher than in 2020, with total volumes expected to breach US$1
billion this year. It is also positive to see carbon credits from
reforestation projects command significant price premiums over
other project types.
Interest in carbon markets has been further buoyed by COP26
coverage. We look towards COP26 with great interest for a number of
reasons. Woodbois will have a presence at the conference, and we
are excited by the opportunity to contribute to discussions and
grow our network in the climate space. We also hope that the
conference will set in place further mechanisms for change,
hastening global action in line with the goals of the Paris
agreement and allowing our inherent strengths to be increasingly
relevant to the transformations required."
Enquiries:
Woodbois Limited
Paul Dolan - Chair and CEO + 44 (0)20 7099 1940
Canaccord Genuity (Nominated Advisor and Broker)
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
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, which
was formed in March 2021, 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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