Productivity and profitability have suffered

The harvest volume in 2019 was 243 500 m3, an increase of 2.1 % over the previous year (previous year: 238 600 m3). In the sawmills in Bambidie, 125 000 m3 and thus 0.8 % fewer logs were processed. The sawn timber production amounted to 41 750 m3 (previous year: 44 700 m3). Sales would have been about EUR 3 million higher if it had been possible to keep deliveries steady at the turn of the year. Interruptions in handling at the port of Libreville as well as more difficult access to the port and a shortage of containers have hampered deliveries since September 2018. This continued through the end of the year. The maintenance work in the sawmills was carried out as scheduled. However, two storm damage events in November led to a three-week interruption of operations in the Okoumé sawmill. Due to this shutdown, a total of 6.7 % less sawn timber was produced.

The veneer plant (TGI) processed 54 600 m3 (previous year: 55 200 m3) with slightly reduced yield. Overall, the production volume of veneer decreased by 5.0 % in 2018. The market environment has changed considerably. Numerous sawn timber and veneer producers have settled in the newly formed industrial zone in Gabon and are increasingly seeking and finding access to the European market. Even if they are not yet FSC or PEFC certified, this increases the pressure on our production and sales opportunities.

PW Gabon's total investments in the amount of EUR 4.03.8 million were used for forest machinery (EUR 1.1 million), homes for employees and their families in Bambidie (EUR 0.3 million), and sawmill machinery (EUR 2.4 million). The new sawmill for Azobé timber will be completed by the end of 2019 and will start production in 2020. From that time on, we will have substantial volumes of hardwood that we would not have been able to process without this investment.

The staffing situation remained stable and the fluctuation among the foreign managers was also in line with the usual pattern. The forestry team was supplemented by two Swiss experts.

The input tax credit with the Gabonese government increased to EUR 4.7 million (previous year: EUR 3.7 million). In combination with the delivery and sales delays mentioned above and the necessary investments, this led to a critical liquidity situation. Inventories increased by about EUR 0.9 million. We assume that the situation will improve because financing of the investments will be taken care of by the end of April 2019 and shipments are now possible again on a continuous basis. During fiscal year 2018, in addition to the challenges at the port, the transport routes to Libreville were also impaired, both by road and by rail. There were too few railcars available and the road network was interrupted for a long period of time. Even today, certain roads can only be used by making major detours.