What it does

Woodbois Limited (LON:WBI) is an Africa-focused forestry and timber trading company.

It is involved in the production, processing, manufacture and supply of sustainable African hardwood (i.e. beech and blackwood) and hardwood products.

The AIM-listed company manages and operates around 1mln acres of natural forest concessions in Gabon and Mozambique, where it also has manufacturing facilities.

Its products are transported all around the world, and used for things such as boat building.

As well as harvesting and producing its own products, Woodbois also sources softwood (pine and redwood) and hardwood products and sells them across the globe.

Change of name reflects change in focus

Formerly known as Obtala, the company sold off its agriculture business in Tanzania in 2019.

That was part of a move to double-down on the timber trading and production arm of the business, which bosses thought would help attract new investors and trade finance partners.

That turned out to be the case, with 1798 Volantis Fund, Lombard Odier Asset Management’s small cap team, subscribing for US$6.5mln (£5mln) worth of shares and committed to providing a US$5mln loan.

Lombard Odier is now the company’s largest single shareholder with a 25% stake.

How it’s doing

For the year ended December 31, 2019, the group noted that revenues had risen by 45% year-on-year to US$19.5mln, while its LBITDA from continuing operations narrowed to US$1.9mln from US$3.8mln.

The company also said recovery rates from its sawmill in Gabon had risen to 40% from 33% during the year, while post-period it had recommenced operations in Mozambique after more than two years.

Meanwhile, in mid-April the company reported a 10% year-on-year rise in revenues to US$4.9mln in its first quarter, highlighting “no discernible slowdown in demand” for its timber and forestry services.

What the boss is saying

“The US$19.5m in revenues achieved in 2019 constitutes less than half of one percent of the US$4bln African export timber market. The immediate target is 2% market share but I see no reason to believe that 5% is an unrealistic ambition”, Paul Dolan, Woodbois’ chairman and chief executve said in late April.

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