Income statement

Total income

The net sales in 2017 amounted to EUR 45.0 million, which is 8.9 % higher than the previous year’s sales of EUR 41.3 million. This was achieved primarily through a 10 % increase in sales volumes. The impact of the price/product mix and currencies was only -0.4 %.

The increase in sales would have been even higher if we had been able to ship all goods by the end of the year. Infrastructure difficulties in Gabon and a far-reaching inspection of the port in Manaus (Brazil) hindered shipping, but not production capacity.

Sales from Brazil fell by EUR 0.7 million as a result of the delivery difficulties, while we achieved in Gabon an increase of 7.3 % in sales. Trading sales in logs and sawn timber from Europe even increased by 111.1 % over the previous year.

Sales proceeds from emission certificates amounted to EUR 0.4 million (previous year: EUR 0.7 million). The prices of the certificates are about 60 % lower due to overcapacities on the market.

Operational development: Costs and market

The production volume of sawn timber in Brazil fell by 10.6 %, while yield was increased by 1 percentage point. The positive deviation from the decline in sales was due to the sale of inventories. In the context of slightly higher costs in local currency, the negative exchange rate effect was about 10 % on a consolidated level due to the recovery of the BRL. This could not be compensated by the sales prices achieved.

In the saw mills in Gabon, 1.4 % more logs were processed and yield was increased by 3.8 percentage points. The measures taken to increase productivity had an impact. More valuable wood species could also be processed, which resulted in a lower yield but also achieved a higher sales price.

In the veneer plant in Gabon, production volume fell by 4.5 %, while yield rose by 0.5 percentage points. We reduced production to 2-shift operations starting in September 2017 due to the temporary saturation of the customer market. 3-shift operations were resumed in mid-January 2018.

The investment volume of EUR 2.2 million remained at the previous year’s level. The main focus was on replacement investments in vehicles, renovation projects in road construction, seasoning capacities for sawn timber, and a drying kiln for the veneer plant. This allowed us to further improve added value.

The average prices for sawn timber in the Group were below the previous year’s level. This is mainly due to the mix of timber species in Brazil, which can vary greatly in wood species and quality depending on the harvest region. However, higher production volumes compensated for this disadvantage. The demand for certified sawn timber and veneer is steadily increasing. Since we cannot increase our own harvest volumes at will, we will continue to expand our trading business. Europe continues to be our main sales market with a share of about 56 %, followed by Asia with 23 %, Africa with 15 %, and other countries with 6 %. The share in Europe fell by 8 percentage points in favour of the Asian market, which is becoming increasingly important for the Group.

Operational contribution

Production costs fell by 4.4 %, and the operational contribution increased by 8.9 % or EUR 3.7 million compared with the previous year. The focus for 2018 is on increasing production in the saw mills while at the same time improving yield. A productivity increase is also expected in the veneer plant. Additional investments in processing and road construction machinery will contribute to a further reduction in costs and an increase in efficiency.

Operating result (EBITDA)

Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to EUR 8.2 million, which was EUR 1.3 million or 19.2 % above the previous year (EUR 6.9 million). This corresponds to an EBITDA margin of 18.2 % (previous year: 16.7 %). While the operational contribution improved by EUR 3.7 million, other costs and income rose by EUR 2.3 million.

As a result of unrealized sales, high inventory levels, and appreciation of the Brazilian currency, the EBITDA margin at PW Amazon fell to only 1.2 %. In Gabon, on the other hand, the EBITDA margin increased by 5.7 percentage points to 32.4 % and the EBIT margin by 9.1 percentage points to 18.6 %. Consolidated depreciation was EUR 4.7 million, 11.3 % lower than in the previous year. At Group level, earnings before interest and taxes reached EUR 3.5 million, corresponding to a margin of 7.8 %.

Financial result

At EUR -1.8 million, the financial result was significantly lower than the previous year’s figure of EUR -4.4 million. In addition to the repayment of more expensive loans, the currency effect made a contribution to this. While the currency effect in the previous year was EUR -0.1 million, it amounted to EUR 0.9 million in fiscal year 2017. Net debt was within the range of the previous year, given that net working capital increased by EUR 4.1 million due to the circumstances described.

Net result

Net profit reached EUR 1.6 million, an improvement of EUR 4.4 million (previous year: EUR -2.8 million). The net profit margin was 3.7 %.

Outlook

Both harvest and production volumes will increase again in 2018. The net sales increase will be between 5 % and 10 %, and costs will develop at a disproportionately low rate. The investment volume will reach about EUR 6 million. We are convinced that the Group will continue to develop positively.