Woodbois Ltd (LON:WBI) told investors that it has cause for optimism as a “pronounced uptick in demand” could be seen in the summer months.
The African timber firm’s first-half revenue was impacted by the coronavirus (COVID-19) pandemic lockdown measures, amounting to US$8.6mln versus US$9.3mln in the same period in 2019. It nonetheless saw its negative underlying earnings (EBITDA) narrow to US$794,000, compared to US$1.45mln in the first half of last year.
As a result of a transformational fundraise and debt restructuring net debt decreased to US$1.1mln from US$49.9mln, Woodbois noted.
“We remain ever conscious of the uncertain course and impact of COVID-19 and continue to ensure we remain flexible and ready to react promptly, but recent improved conditions both in Gabon and in the trading arena give cause for optimism as a pronounced uptick in demand began to filter through as we entered the summer months,” Paul Dolan, Woodbois chairman and chief executive said in the results statement.
"Management is now focused on ensuring sustainable profitability and long-term cash generation, with the clear objective to deliver on our commitment to pay a dividend in 2022."
Dolan, meanwhile, highlighted the significant corporate and financial progress during the period.
"The year to date has seen a significant reshaping of Woodbois, with the transformational £13.1 million fundraise enabling us to meet our objective of restructuring the balance sheet,” he added.
Notably, the company was able to restart operations in Mozambique after a hiatus of more than two years. It also highlighted that, before COVID-19 disruptions, recovery rates from new sawmill lines had driven an improvement in margins.
As a result, the company said it has confidence that current targets for the full year 2020 can be met if COVID-19 restrictions are lifted in the near term.