Woodbois Ltd (AIM:WBI, OTC:WODBF) posted interim results for what was a “tough” start to 2023 but is optimistic about a “marked upturn in activity” for the final quarter of the year and beyond.
The African-focused sustainable forestry, reforestation, carbon sequestration and timber trading company said David Rothschild, highly experienced in West African operations, has today been appointed as chief executive, having been a non-executive director for the past two years.
He was able to report a current cash balance of US$3.7 million and borrowings and leases of US$4.7 million as of yesterday, from US$6.0 million at the end of June after the fundraising and debt settlement agreed that month, with debts cut to US$5.6 million from US$15.1 million.
Working capital stood at US$9.0 million, including cash, receivables, inventory less trade and other payables. Of this, inventory was US$2.1 million, excluding borrowings.
The first half saw revenue of US$4.8 million generated, compared to US$11.3 million a year earlier as activity was greatly reduced owing to effects of the unseasonal weather in the first quarter and then the shock withdrawal of its previous debt facility.
Roughly 3,700 sq metres of sawn timber was produced, compared to 9,565sq m in the prior half year, partly reflecting inventory draw-down, while veneer production was approximately 2,000sq m versus 2,740sq m last time.
A comprehensive business review in the third quarter has included arrangements for a trading finance facility that are said to be in the final stages of due diligence and expected to close in the near future.
In Gabon, where the company was awarded 50,000 hectares for new forest planting, carbon credit documentation was said to be “progressing well” as activities started to return towards normal from mid-September after a new government was put in place following August’s coup d'état.
“2023 has been a very difficult year for the company thus far, but having weathered some pretty severe challenges and having re-built the company's balance sheet, we now are rebuilding production, performance and profitability across the company's divisions,” said Rothschild.
“We see near-term opportunities to return the business to positive EBITDAS and profitability in 2024 on the back of modest capital needs.”
He said Woodbois is driving to return to optimal production levels in its factories, as well as to significantly scale the international trading business and initiating the afforestation and carbon capture project in Gabon.
Chair Graeme Thomson hailed Rothschild’s appointment, saying he will spearhead a hoped-for upturn in activity in the final quarter.
He said the forthcoming shareholder meeting will see the presentation of a “future strategy to maximise value”.