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Annual Report 2021
Annual Report 2021
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Annual Report 2021
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Table of contents for the Annual Report 2021 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 certificatesContribution 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
Reduced harvest volume, increased production volumes, higher yieldNew concessions to secure our activitiesSummary of further activitiesSocial and environmental sustainability continues to be at high levelOutlook for 2022
Gabon
Operational successes despite difficultiesIncrease in working capital due to delivery delaysMany projects and activitiesOutlook for 2022
TradingCarbon & Energy
Emission certificates thanks to residual wood in BrazilianEmission trading together with myclimatePrecious Woods Carbon & Energy
Veneer
Veneer production
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, consolidation 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. Biological assets12. Intangible assets and goodwill13. Investment in associates14. Non current loans and investments15. Inventories16. Prepayments17. Trade and other receivables18. Trade and other payables19. Financial liabilities, other than trade and other payables20. Financial instruments by category and fair value hierarchy21. Leasing22. Share capital23. Major shareholders24. Earnings per share25. Related party balances and transactions26. Provisions27. Contingencies28. Income taxes29. Employee benefits30. Currency translation rates31. Basis of consolidation32. Increase of investment in MIL Energia Renovável Ltda.33. 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 2021 and 2020Statements of income 2021 and 2020Notes to the financial statements of Precious Woods Holding Ltd
Essential accounting and valuation principles1. General2. Authorized share capital3. Conditional share capital4. Investments in subsidiaries5. Financial assets to Group6. Other short term interest bearing liabilities7. Long term interest bearing liabilities8. Board and Executive compensation9. Depreciation, amortization and impairment10. Major shareholders11. Pledged assets / other securities12. Other note / Full time employment13. Other note / Lease liabilities14. Other note / Other short term liabilities15. 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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13. Investment in associates

Movements in investments in associates
in thousand EUR   2021   2020
At 1 January   3 340   1 066
Net additions   –   3 099
Share of profit/(loss) of associates   –723   –354
Dividend earned   –531   –138
Change in consolidation scope - disposal   –660   –
Currency effects   –0   –333
At 31 December   1 426   3 340

There are no unrecognized share of losses relating to the above associates.

Proportion of ownership in investment in associates
Associate   Country   31 December 2021   31 December 2020
MIL Energia Renovável Ltda. (ex BK Energia) 1   Brazil       40%
Compagnie des Placages de la Lowé S.A. 2   Gabon   49%   49%
1 until 31 May 2021; as of 1st June 2021 100% investment and fully consolidated subsidiary
2 since 1st October 2020
MIL Energia Renovável Ltda. (former BK Energia Itacoatiara Ltda.)
in thousand EUR   2021   2020
At 1 January   980   1 066
Share of profit/(loss) of associates   211   385
Dividend earned   –531   –138
Change in consolidation scope - disposal   –660   –
Currency effects   –0   –333
At 31 December   –   980

On 31 May 2021 MIL Madeiras Preciosas Ltda., already owning 40 % of BK Energia Itacoatiara Ltda., acquired the remaining 60 % of the ordinary shares outstanding, and with this transaction, obtained 100 % ownership of the renewable power plant. BK Energia Itacoatiara Ltda. was renamed MIL Energia Renovável Ltda. afterwards. The details of this acquisition are further explained in Note 32.

Set out below is the summarized financial information for BK Energia Itacoatiara Ltda.:

in thousand EUR   31 December 2021   31 December 2020
Current assets   –   2 692
Non-current assets   –   72
Current liabilities   –   313
Equity   –   2 451
Group's share in equity   –   980
Group's carrying amount in the investment   –   980
in thousand EUR   Jan - May 2021   2020
Revenues   1 301   2 738
Cost of sales   –672   –1 374
Administration expenses   –79   –178
Financial result   34   72
Earnings before tax (EBT)   584   1 258
Income tax (expenses)/income   –56   –296
Net profit/(loss) for the period   528   962
         
Group's share of profit/(loss) for the year   211   385

The associate had no contingent liabilities or capital commitments as at 31 May 2021.

Compagnie des Placages de la Lowé S.A.
in thousand EUR   2021   2020
At 1 January   2 360   –
Net additions/(disposals)   –   3 099
Share of profit/(loss) of associates   –934   –739
At 31 December   1 426   2 360

Precious Woods Tropical Gabon Industrie S.A., owned 100 % by Precious Woods Group, entered into an arrangement with Placage Déroule du Gabon S.A., also a veneer producing company in Gabon, owned 100% by Arbor Group, France. Precious Woods Tropical Gabon Industrie S.A. acquired 49 % shares and voting rights in Placage Déroule du Gabon S.A. by contribution of net assets. The deal took place on 1st October 2020. At the same time, Placage Déroule du Gabon S.A. was renamed to Compagnie des Placages de la Lowé S.A. The new company is located in Libreville.

Precious Woods Group has no control or joint control over the investment but exercises significant influence.

At the date of acquisition, the fair value of the investment in Compagnie des Placages de la Lowé S.A. amounted to EUR 4.4 million.

Set out below is the summarized financial information for Compagnie des Placages de la Lowé S.A.

in thousand EUR   31 December 2021   31 December 2020
Current assets   11 807   12 902
Non-current assets   4 174   3 438
Current liabilities   9 719   9 724
Non-current liabilities   4 028   3 182
Equity 100%   2 234   3 434
Group's share in equity 49%   1 095   1 683
Goodwill   677   677
Elimination of unrealized profit on downstream sales   –346    
Group's carrying amount in the investment   1 426   2 360
in thousand EUR   2021   2020
Revenues   15 035   3 812
Cost of sales   –15 036   –4 437
Administration expenses   –532   –761
Financial result   –506   –81
Earnings before tax (EBT)   –1 039   –1 467
Income tax (expenses)/income   –161   –41
Net profit/(loss) 100% 1   –1 200   –1 508
Net profit/(loss) 49%   –588   –739
Elimination of unrealized profit on downstream sales   –346   –
Group's share of profit/(loss) 1   –934   –739
1 In 2020, only October - December

The associate had no contingent liabilities or capital commitments as at 31 December 2021 or 2020.

Accounting policies

Associates are entities, over which the Group holds 20 to 50 percent of the voting rights and exercises significant influence. The Group does not exercise control over their financial and operational policy decisions. These associates are accounted for using the equity method. The Group’s share of profit of associate is classified within operating profit as these businesses form an integral part of the Group’s financial performance, reflecting its core business activities. Goodwill arising from an acquisition is included in the carrying amount of the investments in associated companies. Equity accounting is discontinued when the carrying amount of the investment together with any long-term interest in an associate reaches zero, unless the Group has either incurred or guaranteed additional obligations in respect of the associate.

The Group tests associates for impairment only when there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the investment. Objective evidence of impairment includes events such as significant financial difficulties of the associate or information about significant changes with an adverse effect that have taken place in the economic environment in which the associate operates, and indicates that the carrying amount of the associate may not be recovered.

An impairment loss is only recognized when the carrying amount of the associate exceeds its recoverable amount, being the higher of value in use and fair value less costs of disposal. The recoverable amount of an investment in an associate is assessed for each associate, unless the associate does not generate cash inflows from continuing use that are largely independent of those from other assets of the Group.

The financial statements of the associate are prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the accounting policies in line with those of the Group.