Woodbois secures purchase orders as it focuses on efficiency

(Sharecast News) - Woodbois said in an update on Monday that it has secured substantial purchase orders and implemented measures to enhance production continuity and financial efficiency. The AIM-traded company said its key international clients in Libya, Iraq and South Korea had collectively placed indicative purchase orders for over 9,000 cubic metres of sawn timber, valued at about $4.5m.

It said the orders were expected to be fulfilled over the next 12 months, with most shipments occurring in the first half of 2024.

Additionally, open veneer contracts guaranteed sales of Woodbois' entire projected production for the next six months, totaling 6,600 cubic metres and valued at around $4m.

Woodbois said it was actively managing its supply chain to ensure timely delivery.

Currently, 17 containers of timber were at the port in Libreville awaiting shipment, with another 55 containers being prepared from stock at the Moulia warehouse.

The additional containers were scheduled for shipment in the first quarter.

Woodbois said it had also improved its cash flow dynamics by transitioning many clients to 'cash for documents' payment methods, reducing reliance on traditional letters of credit.

The shift enabled more efficient financial operations, and ensured faster payment cycles.

To maintain production during the challenging rainy season, Woodbois said it had started purchasing 2,000 cubic metres of high-quality logs per month from third-party suppliers in Gabon.

That, the board said, would ensure consistent production levels despite adverse weather conditions and difficult forest road access.

Operational efficiency initiatives had meanwhile yielded significant cost savings.

Salary costs in Gabon had been reduced by 46% compared to 2023, while international salary costs outside Gabon had decreased by 45%.

The reductions had been achieved without compromising production capacity, the company said.

"We are making progress in streamlining our operations and improving financial performance," said chief executive officer Guido Theuns.

"By securing orders from known and reliable clients, enhancing payment terms, reducing costs, and taking proactive steps to maintain production during challenging conditions, we are building a stronger foundation for sustainable growth.

"I am proud of the team's efforts and remain confident in our ability to deliver value for our shareholders and clients."

At 1336 GMT, shares in Woodbois were down 1.22% at 0.2p.

Reporting by Josh White for Sharecast.com.