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Annual Report 2019
Annual Report 2019
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Annual Report 2019
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Table of contents for the Annual Report 2019 report

Operational review
Key FiguresTo our shareholdersAbout Precious Woods / Sustainability
VisionProducts and marketsGoal of sustainable growthManagement organization with strong market orientationSustainable forestry in all dimensionsMarket opportunities thanks to sustainability certificates for tropical woodContribution to the UN Sustainable Development GoalsPrecious Woods Amazon: Close ties with the local populationPrecious Woods in Gabon – Projects for the protection of flora, fauna, and biodiversitySounding BoardInstitutional framework as opportunity and challengeIllegal logging threatens certified timber trade and sustainable developmentCarbon FootprintThe role of forestry in the current climate change debateMilestones Precious Woods
Group results
Income statementBalance sheet
Brazil
Higher harvest volume, increased production volumes, higher yieldContinued high resources for legacies and special factorsSocial and environmental sustainabilityOutlook for 2020
Gabon
Negative development of productivity and profitabilityMore difficulties than usualProgress in social and environmental sustainabilityOutlook for 2020
TradingCarbon & Energy
Emission certificates thanks to residual wood in BrazilianEmission trading together with myclimatePrecious Woods Carbon & Energy
Corporate Governance
1. Group structure and shareholders2. Capital structure3. Board of Directors4. Group Management5. Compensation, shareholdings, loans6. Shareholders’ rights of participation7. Changes of control and defense measures8. Auditor9. Information policy
Shareholder information
Share capitalEquivalent to 100 sharesStock market listingShare register informationCompany headquartersStock price development
Financial Report
Precious Woods Group financial statements
Consolidated statement of profit or lossConsolidated statement of comprehensive incomeConsolidated statement of financial positionConsolidated statement of changes in equityConsolidated statement of cash flowsNotes to the consolidated financial statements
1. Basis of presentation and general accounting policies2. Financial risk management3. Financial information by segment4. Revenue from contracts with customers5. Consumables used and other production costs6. Labour costs7. Other operating income and expenses8. Depreciation, amortization and impairment9. Financial income and expenses10. Property, plant and equipment11. Land12. Biological assets13. Intangible assets14. Investment in associates15. Inventories16. Prepayments17. Trade and other receivables18. Non current financial assets19. Trade and other payables20. Financial liabilities21. Financial instruments by category and Fair value hierarchy22. Leasing23. Share capital24. Major shareholders25. Earnings per share26. Related party balances and transactions27. Provisions28. Contingencies29. Income taxes30. Employee benefits31. Currency translation rates32. Basis of consolidation33. Subsequent events34. Approval of financial statements and dividends
Report of the statutory auditor on the consolidated financial statements
Precious Woods Holding Ltd financial statements
Balance sheets as of 31 December 2019 and 2018Statements of income 2019 and 2018Notes to the financial statements of Precious Woods Holding Ltd
Essential accounting and valuation principles1. General2. Authorized share capital3. Conditional share capital4. Investments in subsidiaries5. Other short term interest bearing liabilities6. Long term interest bearing liabilities7. Board and Executive compensation8. Depreciation, amortization and impairment9. Major shareholders10. Pledged assets / other securities11. Other note / Full time employment12. Other note / Lease liabilities13. Other note / Significant events after the reporting date
Report of the statutory auditor on the financial statements
Additional information
Contact addresses
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Higher harvest volume, increased production volumes, higher yield

Increases in volume and yield

The harvest volume was 156 100 m3, 1.1 % more than in the previous year. The sawmill processed 155 300 m3 of logs, 27.5 % more than in the previous year. PW Amazon was once again able to increase yield. This resulted in a 33.0 % higher sawn timber production of 34 350 m3 (previous year: 25 820 m3). The production year began in mid-January. The annual maintenance work could be carried out as scheduled and staggered throughout the year, so that production was only marginally restricted.

The harvest area was divided into two different sectors in 2019. The ministry granted us the harvest permit for the new sector too late, but fortunately this caused only insignificant delays in the work. Harvesting activity was much more impacted by early and heavy rainfall, which began in September already. Normally heavy rains begin only in December, when the timber has already been harvested, but the logs have not yet been completely transported out of the forest. These exceptional weather conditions meant that we were unable to complete the harvest on schedule in mid-November, but instead had to work until the end of December and this under difficult conditions. The log transport should have been completed in February 2020 according to the schedule. However, this was prevented by a wrongful blockade of logistics by the ministry. This obstruction is once again a clear case of abuse of authority and corruption, which will lead to further legal action on our part. Already in 2019, we filed a claim against the government for damages in the amount of approximately EUR 0.9 million, due to the impairments and events that took place in 2018.

The investment volume in Brazil was about EUR 0.8 million. This was spent on the expansion of the road network, new infrastructure, renovation measures at the sawmill, and transport equipment.

The local currency (BRL) increased in value by about 2.7 % against the euro. 85 % of sales are made in EUR, 10 % in USD, and 5 % in BRL, while nearly 100 % of costs are in BRL. This had a slightly negative currency impact on the income statement.

Legal rules and our commitment to the sustainable use of tropical forests require our company in Brazil to harvest many different species of timber. This constitutes also a great challenge and also entails greater complexity for our operational activity. Our ongoing task is to establish and promote lesser-known and lesser-used timber species on the export markets, to examine their areas of application and to increase their familiarity. On the local market, prices remain very low, and transport costs to the populated areas in the south of the country are high. There is also a lack of awareness in regard to legally produced timber, and we are competing in the domestic market with illegally harvested and therefore cheaper sawn timber. As a consequence, our competitiveness on the local sales market remains limited. We are all the more pleased that we are regularly able to gain new customers in Europe, the United States, and Asia for the use of lesser-known timber species exported from Brazil. Increasingly, we are successful in educating customers, persuading them to buy these timber species, entering into promising partnerships, and opening up markets for products with specific applications for the wood.