Woodbois Ltd (LON:WBI) said it has “continued to make solid progress” across both its trading and production businesses as well as making “two notable hires” over the last few months.
In an operational and corporate update, the Africa-focused forestry and timber firm said since its third-quarter update in early October global demand for sustainably produced hardwood has “started to rebound” and that its production division has increased output in October and November by 41% over the previous quarter’s average.
The company also said that following the completion of a balance sheet restructuring in August, which reduced its net debt to US$1.1mln from US$49.9mln, it is continuing to drive down interest costs and the firm is now on track for a 90% interest cost saving in the fourth quarter of 2020 versus the second quarter, the last three-month period before the restructuring.
Woodbois added that as a result of the coronavirus (COVID-19) pandemic, in particular shipping container constraints, it now expects that around US$2mln of turnover originally forecast for the fourth quarter will now not occur until next year. Due to the deferment, the company said turnover for 2020 is now predicted to be around US$15mln, while its earnings expectations for the year remain unchanged.
The group also noted two new hires in the period, saying it has appointed Rémy Cazeau as its production director for Gabon. Woodbois said Cazeau has over 20 years’ experience managing and optimising hardwood production facilities and that his appointment is expected to “further unlock the operational leverage that has been built into the business from recent [capital expenditure], as well as from the significant levels of new equipment that will come online during 2021”.
Meanwhile, the company said Jake Slocombe will join its trading team as head of sales for the UK and the US, adding that his “impressive track record in digital advertising sales” and new economy skills will drive growth and “maximise the potential” of its trading technology and spearhead the firm’s entry into the US market.
Woodbois also said it has identified additional personnel and expected to be able to announce “further quality additions to the team for key roles in the near future”.
“Despite a challenging operational backdrop, we continue to push the restructured business forwards, focusing our efforts on increasing production from Gabon and capturing the opportunity to transform the way hardwood timber is traded. We continue to be affected by the COVID situation, which has resulted in the deferral of a portion of sales rolling into next year. However, the board firmly believes that this short-term impact is eclipsed by the outlook for sustainable hardwood, which sees increasing demand for quality product with clear traceability. We are ensuring we are set to capture the opportunity for the benefit of our shareholders and the countries in which we operate”, Woodbois executive chairman and chief executive Paul Dolan said in the operational update.
“Rémy and Jake are very strong additions to the team. They represent extremely high-quality hires and are set to further enhance both our operational processes, and on the trading side, to ensure an unrivalled cutting-edge trading standard. On behalf of everyone at Woodbois, I welcome them to the team and look forward to their contribution to our continuing growth”, Dolan added.
Woodbois shares were 2.1% lower at 2.3p in early deals on Wednesday.