Corporate Update and Strategic Developments

Woodbois Limited

10 September 2024

 

10^th September 2024

WOODBOIS LIMITED

("Woodbois," the "Group," the "Company")

Corporate Update and Strategic Developments

Operational and Strategic Reorganisation

Woodbois Ltd, a leading player in the international sustainable timber industry, is pleased to provide a comprehensive update on its ongoing operational and strategic reorganisation, following previous announcements on 28 June 2024, 21 August 2024, and 2 September 2024.

Our Group-wide reorganisation continues to progress with significant strides made in streamlining global operations. These initiatives have delivered a leaner, more cost-effective structure, resulting in substantially reduced operational costs and improved profitability. This has not only enhanced operational efficiency but has also positioned the Company for long-term growth. As part of this reorganisation, we continue to attract top-tier talent to drive performance and support our strategic goals.

As previously communicated, we have divested our operations in Mozambique, allowing us to further optimise our international structure with the support of tax specialists. This rationalisation includes the closure of two additional international offices and the elimination of several subsidiaries. Looking ahead, Woodbois will centralise its administrative efforts across three strategic regions: Guernsey (AIM listing and corporate oversight), Gabon (sustainable timber production), and Dubai (global trade operations). The establishment of our Dubai office is nearing completion, with operations expected to commence within the next two weeks.

Gabon Leadership Appointment

We are delighted to announce the appointment of Jean-Claude Martin as Directeur General of Woodbois Gabon. Jean-Claude has been a consultant to the Company since January 2024 and brings over 30 years of management experience in the timber industry within the Equatorial Congo Basin. His leadership will be pivotal in strengthening our Gabonese operations and expanding our export activities.

To support our ongoing growth, we are establishing an upgraded administrative office in Mouila, the location of our production facilities, which will enhance communication and operational efficiency across the Group. Additionally, the office in Libreville will relocate to a more compact facility near the port to streamline logistics and customs-related activities.

Operational Enhancements and Production Update

As part of our ongoing investments in production capabilities, all key equipment has been upgraded and is being meticulously maintained. In September, we began ramping up production levels, targeting 50 containers per month (each container typically containing 45 m³-50m³ of timber). Year-to-date (YTD), our production volume has reached 160 containers of sawn timber and veneer, with all of this production already sold. This highlights the continued strong demand for our products, with several customers committed to purchasing all we can produce.

In addition to increasing production, we are doubling our drying capacity this month by installing new kilns at our Mouila site and adding two new saw lines to further boost factory output. We have procured an additional 20,000m³ of logs, and together with our own harvesting operations, we are well-positioned to maintain high production volumes, even during the rainy season.

Payment Terms and Cash Flow Management

We have successfully renegotiated payment terms with many of our customers, resulting in a significant improvement in cash flow management. Previously, payments were delayed until products were delivered to their final destinations. Under our new agreements, Woodbois will now receive full payment within 10 days of vessel departure, which will significantly enhance liquidity.

Our focus remains on the sale of high-quality timber produced by our own operations, which offers superior margins and reduces financial risk. As at 31 August 2024, we have a forward order book of over USD 7 million in contracts across the Middle East and Asia, which we expect to fulfil and recognise as revenue over the next 12 months. Our veneer production is fully pre-sold under agreed-term contracts. Additionally, we have resumed hardwood cutting for species such as Dabema, with a notable contract for export to the UAE, and are observing increasing interest from new markets in the Caribbean and South America.

Strategic Growth and Third-Party Trading

In light of the inherent risks associated with third-party timber trading, such as upfront costs and uncertain payment collection, Woodbois has implemented stricter controls. Moving forward, such transactions will only be pursued under clearly defined conditions, with a primary focus on cash flow and margin protection.

While we continue to drive organic growth through enhanced production and expanded markets, we are also actively exploring opportunities for strategic partnerships and potential acquisitions. These initiatives align with our ambition to further scale the business and diversify revenue streams.

Outlook

The Board remains highly optimistic about Woodbois' future prospects. With a solid foundation now in place, reduced operational costs, and growing production levels, we are well-positioned to pursue sustainable growth, deliver increasing profitability, and capitalise on our strategic initiatives. As we prepare the release of our half-year interim results, which will be published very soon, we remain confident in our ability to generate strong returns for our stakeholders.

We extend our gratitude to our stakeholders for their continued support as we advance towards our strategic objectives with renewed focus and purpose.

Woodbois Limited Guido Theuns, Executive Chair & CEO Johannes Bloemen, CFO	+ 44 (0)20 7099 1940
Canaccord Genuity (Nominated Advisor and Broker) Henry Fitzgerald O'Connor, Harry Pardoe	+ 44 (0)20 7523 8000
Novum Securities (Joint Broker) Colin Rowbury, Jon Bellis	[phone]
Axis Capital Markets Limited (Joint Broker) Ben Tadd, Lewis Jones	[phone]

About Woodbois:

Woodbois is a Guernsey-based company at the forefront of the timber industry, committed to delivering quality products and sustainable solutions. With a legacy of innovation and a vision for the future, it strives to set industry standards and exceed expectations. Please follow the Company on X: @WoodboisLtd

 

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