Income statement

Total income

The net sales in 2018 amounted to EUR 46.3 million, which is 3.0 % higher than the previous year’s sales of EUR 45.0 million. Currency effects amounted to -1.0 %, volumes increased by 2.9 %, and shifts in the price/product mix contributed 2.0 % to sales. Emission certificates were not settled in the reporting year.

Starting September 2018, regular shipments from the port of Gabon were no longer possible. On the one hand, there was a lack of containers; on the other hand, the ships could not dock due to damage in the port’s infrastructure. In addition, there were transport problems by rail, due to a lack of railcars, and the road network was interrupted for a long period of time. Inventories not delivered at the end of the year amounted to about EUR 3 million, which represents an increased capital commitment but also a lack of margins. The delivery situation in Brazil improved over the course of the first quarter of 2018, and Precious Woods was subsequently able to ship again normally.

Due to delivery delays, we recorded a decline in sales from Gabon of about EUR 1.4 million. In contrast, sales from Brazil rose by EUR 3.1 million. Trading sales in logs and sawn timber from Europe increased by 5.6 % over the previous year.

Emission certificates were not settled in 2018; the proceeds from our activities will accrue in 2019 (previous year: EUR 0.4 million). The prices of the certificates are about 60 % lower due to overcapacities on the market. The calculation basis also changed, and about 30 % fewer certificates were projected.

Operational development: Costs and market

The production volume of sawn timber in Brazil was 14.4 % higher than in the previous year, and yield was increased by 2.4 percentage points. Sales increased by 31.9 % as a result of the additional reduction in inventory of finished goods. The disproportionately low development of local costs and a positive exchange rate effect of about 12 % led to a significant improvement in earnings. However, the result was negatively impacted by one-off legal charges of about EUR 1 million. These legal cases originated in the years 2008-2013.

In the sawmills in Gabon, 0.8 % fewer logs were processed, and a total of 6.7 % less sawn timber was produced. The reason for this was an unscheduled three-week production interruption in November/December because two storms affected our infrastructure in Bambidie.

In the veneer plant in Gabon, production volume fell by 5.0 %, and sales were 4.5 % lower than in the previous year.

The investment volume amounted to EUR 3.5 million (previous year: EUR 2.2 million). The focus was on the new sawmill in Gabon, which will be productive in 2020. Replacement investments were also made in machinery and vehicles, renovation projects in road construction and the expansion of seasoning capacities for sawn timber. These targeted investments will improve the Group’s earning power. Maintenance work at all plants was carried out on schedule.

The average prices for sawn timber across the Group were above the previous year’s level. This was despite the fact that the market was very volatile; in Asia in general and China in particular. New markets had to be found for the main timber species from Gabon (Okoumé), given that demand in Asia declined abruptly. The tightening of import regulations in individual countries is having a positive effect for us. Proof of legality and, to an increasing extent, of sustainability is becoming increasingly important. With our dual certification and credibility, we have a head start here. However, the challenge remains to establish even small quantities of lesser-known species on the markets and with customers. Europe continues to be our main sales market with a share of about 61 %, followed by Asia with 18 %, Africa with 15 %, and other countries with 6 %. The share in Europe fell by 5.6 percentage points in favor of the Asian market.

Operational contribution

Production costs increased by 21.6 %, and the operational contribution decreased by 6.6 % or EUR 1.9 million compared with the previous year. This must be interpreted in the context of unrealized sales, the interruption of operations, and the high one-off charges. Given that the margins not realized in 2018 will accrue in 2019, the result in 2019 will be correspondingly better.

Operating result (EBITDA)

Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to EUR 5.1 million, which was EUR 3.1 million or 37.7 % lower than in the previous year (EUR 8.2 million). This corresponds to an EBITDA margin of 11.0 % (previous year: 18.2 %).

Due to higher sales and the positive currency effect, PW Amazon’s EBITDA margin increased to 12.4 % or EUR 1.6 million (previous year: 1.2 %). Without one-off charges, it would even be 20.1 %. At PW Gabon, the EBITDA margin fell to 18.9 % (previous year 32.4 %). Without the special effects as already reported, operating revenue would have been at the previous year’s level. Consolidated depreciation was EUR 3.4 million, 27 % lower than in the previous year. This is due to the fact, that some assets are fully depreciated. Investments totaled EUR 2.2 million. At Group level, earnings before interest and taxes (EBIT) reached EUR 1.7 million (previous year: EUR 3.5 million). This corresponds to a margin of 3.7 % (previous year: 7.8 %).

Financial result

At EUR -2.8 million, the financial result was significantly below the previous year’s figure of EUR -1.8 million. New loans had to be taken up to finance investments but also working capital. However, the greatest impact on the result came from exchange rates. In 2017 we recorded a positive currency effect of EUR 0.9 million, while in 2018 the account was affected by a negative impact of EUR -0.3 million. This represents a change of EUR -1.1 million. Net debt was EUR 3.2 million higher than in the previous year and amounted to EUR 34.4 million. Loans increased by EUR 0.9 million due to exchange rates.

Net result

The net loss amounted to EUR 1.7 million, compared with the previous year’s profit of EUR 1.6 million.


Production capacity in Brazil was expanded, which will lead to higher processing volumes and higher yields. The total harvest volume will increase slightly and the sawmill for hardwood in Gabon will be completed by the end of the year. The production volume will increase in 2019 mainly by improving yield. The net sales increase will be between 3 % and 7 %; the costs will not develop linearly, resulting in a strong improvement of the operating result. The investment volume will reach about EUR 5 million. The steady improvements in the production workflow and procedures enable us to process higher volumes and strengthen the operating result. Given this background, we are seeking additional concession areas. In the future, an additional harvest quantity could be processed in the existing sawmills.