Woodbois Limited (LSE:WBI) got a favourable reaction from the market for its half-year results, in which the company claimed to have turned a corner.
The African focused forestry, timber trading, reforestation and voluntary carbon credit company posted its first profit in the first half of 2021 with earnings before interest, tax, depreciation, amortisation and share-based payments (EBITDAS) of US$459,000 versus a loss the year before of US$775,000.
The reported loss before tax and depreciation of US$1.00mln was US$980,000, which was a substantial improvement on the previous year’s loss of US$4.3mln.
Revenues, which were affected by the pandemic and the disruption to the global freight shipping sector, eased to US$8.2mln from US$8.6mln in the corresponding period of 2020.
Total sawn timber production soared 120% to 7,000 cubic metres from the year before while veneer production jumped 70% to 1,830 cubic metres.
The group’s gross profit margin doubled to 20% from 10% the year before.
Woodbois ended the reporting period with working capital of US$13.8ln, including cash of US$6.3mln. The group has bank loans totalling US$9.5mln.
“The company has started to see the fruits of the recapitalisation in H2 [second half of] 2020, the revised strategy, the subsequent reorganisation and of key recruits,” said Paul Dolan, the executive chair and chief executive officer of Woodbois.
Paul Dolan: "In H1 2021 we doubled both gross profit and margins, recorded our first positive EBITDAS, delivered a material increase in production volumes and continued to reduce operating and administration costs on a year-on-year basis.”
— Woodbois Limited (@WoodboisLtd) August 11, 2021
“The additional capital items acquired and efficiencies made during H1 serve to strengthen our springboard to accelerate our growth, further improve margins and move into positive operational cash generation; however, the continuing uncertainties created by COVID-19 and the logistical difficulties in the shipping industry make it difficult to fully see the benefits of our operational progress being reflected in H2 and accordingly we will need to remain agile and adaptable to the prevailing circumstances," he cautioned.
Shares in Woodbois were up 4.0% at 5.15p.
Woodbois is pleased to announce its half year results for the six months to 30 June 2021. https://t.co/fB5ObVeKBz
— Woodbois Limited (@WoodboisLtd) August 11, 2021