Woodbois Ltd (AIM:WBI) said it is confident of “materially” increasing revenues and profits in 2022, but shipping delays mean growth is likely to be lower than previous expectations.
The Africa-focused forestry company recorded its first full-year EBITDAS profit in 2021, compared with a loss of US$1.7mln in the previous year. Gross profit soared 180% to US$3.3mln and gross profit margin more than doubled to 20%.
Revenue rose 15% to US$17.5mln in the year to end-December and surged 50% to US$4.8mln in the fourth quarter.
The company said high levels of demand for its products and increased prices compensated for rising costs relating to freight, container disruption, worker shortages and port strikes.
"The unaudited 2021 financial metrics detailed above, including doubling of gross profit margins, a near trebling of year-on-year gross profit and our first-ever positive EBITDAS, illustrate the progress made by the business during 2021 and provide a solid base for future profitable growth,” said Woodbois executive chair Paul Dolan.
The company expects the shipping and container difficulties and Coronavirus (COVID-19)-related disruption to continue at least in the first half of 2022.
In view of the challenges it is facing, it no longer expects to make a maiden dividend payment this calendar year.
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Sawn timber production grew 84% to 13,100 cubic metres (m3) in 2021, while veneer production was 78% higher at 3,800m3.
Woodbois said the installation of a second veneer line is ongoing, with completion expected by the end of March. The new production line is expected to double capacity in 2022.
The company is reviewing its options in Mozambique as conditions in the country remain challenging.
It expects its Gabon operations to continue to deliver strong and profitable growth, following capital projects undertaken in 2021 which are continuing this year.
“The substantial additional hectarage purchased in Gabon in August more than satisfies raw material input requirements at our growing factories, allowing the company to benefit from the elevated levels of inflation now being experienced in many of our target markets,” said Dolan.
The company's cash balance stood at $0.9mln on 31 December 2021, while working capital totalled US$7.7mln, excluding bank loans of US$8.5mln.
Woodbois noted that severely constrained shipping and logistics lowered the level of cash generated in 2021, putting strain on its working capital.
It therefore arranged loan facilities of US$4mln with Lombard Odier and Rhino Ventures, its two largest shareholders, to ensure a stronger working capital position as its works through the logistical challenges it faces to deliver inventory to customers.
“As well as aiming to increase production and profitability in 2022, we aim to become recognised as a reference point for responsible forestry management. Our ongoing investment in equipment, processes and people are made with the intention of ensuring that we are uniquely placed to grow shareholder value while forging a position of leadership in the sustainable African hardwood sector," Dolan concluded.