Woodbois Ltd (AIM:WBI), which turned profitable last year, said it continued to grow profit margins this year and expects to generate increasing amounts of cash.
In a trading statement for the first quarter, the African-focused sustainable forestry company also announced a management reorganisation.
Executive chair Paul Dolan will resume his role as chief executive officer, Federico Tonetti will step down as CEO and non-executive director Graeme Thomson will be chair.
Performance management chief Olivier Normand has moved to the new role of Gabon country chief operating officer after the substantial increase in output from the country last year.
Further operational improvements in Gabon were reported, with the output of veneer increasing 13% and sawn timber by 24% compared to the quarterly average last year. While a shortage of shipping containers continues, the company said 50% more containers were shipped in the quarter than the average last year.
“We expect the business to increase both scale and profitability during 2022 as new production capacity comes online and assuming shipping returns to more normal patterns," the company said.
Group profit margins increased to 23% in the first quarter of 2022 from 20% last year, Woodbois said, attributing this to process efficiencies implemented in the factories during 2021.
“The acceleration of production levels has been carefully managed and limited to the corresponding volumes of product shipped to customers, in order to maintain a consistent cash conversion cycle and to prevent any outsize build-up of inventory,” the company said.
“We still have additional output capacity at both factories to capitalise on, which we will start to utilise when feasible.”
Work on the installation of a second veneer line at the factory in Mouila was held up while awaiting some delayed critical parts, which management expects will be received this month to enable final assembly and testing before the end of June, more than doubling existing capacity to 15,000 sq m of veneer per year.
Owing to shipping delays and Covid effects, Woodbois said it had fully drawn two debt facilities, totalling US$4.3mln, but has not used a US$2mln conditional facility agreed with major investor Lombard Odier.