Group results
Higher sales in a difficult environment
In the first half of 2022, Group sales amounted to EUR 31.3 million, and earnings before interest and taxes (EBIT) amounted to EUR 2.8 million or 9.1%. Sales growth was 15.2% over the same period of the previous year, and EBIT fell by EUR 0.7 million. This result reflects the difficult economic environment and substantial corresponding cost increases. Working capital increased again by EUR 2.4 million, reaching a high of EUR 22.4 million. In May 2022, maintenance work was carried out in the sawmills in Gabon, which meant that industrial activity was reduced during that period. The sawn timber volumes of all sawmills were 10.0% above the previous year. Operations in Brazil developed positively in line with expectations, taking into account the negative exchange rate effect. In Gabon, the result was below expectations, but still satisfactory in light of the intensified infrastructure and logistics challenges. The Group’s net result in the first half-year was EUR –0.3 million (same period of the previous year: EUR 1.4 million). The generated cash flow was below expectations due to the high level of capital tied up in inventory. Inventory that is mostly sold but strongly impacted by the aforementioned challenges. Debt increased by EUR 2.8 million from the end of the previous year, mainly due to the CHF/EUR exchange rate. The outlook and expectations for 2022 as a whole remain positive.
| in EUR million | 30.06.22 | 30.06.21 | Index | Change | ||||
|---|---|---|---|---|---|---|---|---|
| Net Sales Precious Woods Group | 31.3 | 27.2 | 115.2% | +4.1 | ||||
| Net Sales Precious Woods Gabon | 18.5 | 17.8 | 103.6% | +0.6 | ||||
| Sawmills | 13.6 | 13.2 | 103.3% | +0.4 | ||||
| Net Sales Precious Woods Amazon | 8.8 | 7.4 | 119.5% | +1.4 | ||||
| Sawmills | 8.5 | 6.9 | 122.5% | +1.6 | ||||
| Net Sales Energy Biomass power plant 1 | 1.7 | 0.3 | 592.2% | +1.4 | ||||
| Net Sales Precious Woods Trading | 4.0 | 2.0 | 203.2% | +2.0 | ||||
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1 Energy sales as of June 1, 2021
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The exchange rate effect on sales was 2.6 % compared to the same period last year.
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Net sales group
31.3
EUR million
The timber markets continued to develop positively in terms of volume and price. Demand weakened somewhat due to persistently high transport costs and worldwide inflation. Average prices in the order backlog are currently still higher than in the previous year, but price pressure is increasing and the order backlog is declining somewhat. In Brazil, we reduced production at the sawmill to single-shift operations at the end of June/beginning of July to carry out necessary maintenance work. Given that the EUR and USD have weakened also against the Brazilian real, this results in higher costs on a consolidated basis and lower income in the local currency. In Gabon, the inventory of both logs and sawn timber volumes was high because transport options to the veneer plants and the port were severely limited, and we increasingly had to rely on truck transport instead of rail transport. This resulted in considerable additional costs.
Deliveries from energy production contributed disproportionately to the reported increase in sales. This is due to the fact that in the previous year only the sales for the month of June were included in the consolidation as of the first half of 2021. Sales of MIL Energia amounted to EUR 1.7 million (previous year: EUR 0.3 million).
The merger of the two veneer plants into the new company CPL in Gabon generated a positive result in the first half-year, and productivity increased by 20%. The increase in sales of veneer processed through Precious Woods Holding Ltd. amounted to 11.4%. Given that value added is not fully consolidated, but rather only sales are settled on a commission basis, this leads to a dilution of the margins in percentage terms.
EBITDA
5.1
EUR million
Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to EUR 5.1 million (previous year: EUR 5.5 million), corresponding to a margin of 16.1%. Earnings before interest and taxes (EBIT) reached EUR 2.8 million (previous year: EUR 3.5 million) and a margin of 9.1%. In addition to the negative exchange rate effect, the result was primarily affected by the significant price increases: prices for diesel rose by 38%, maintenance goods by 30%, and personnel costs by 10% over the previous year.
The financial result was below the previous year period at EUR –2.0 million (previous year: EUR –1.5 million). The current interest charge amounted to EUR 1.3 million (previous year: EUR 1.2 million). The net result was EUR –0.3 million (previous year: EUR 1.4 million); EUR 0.6 million of this decline was due to exchange rate effects.
Equity ratio
40.0%
The equity ratio was 40.0% on the reporting date (end of previous year: 37.8%). The land values and biomass in Brazil are accounted for in BRL. The current exchange rate change compared to the end of the year had a positive effect on equity. Net debt increased by EUR 2.8 million from the end of the previous year to EUR 43.2 million. This was mainly due to the high level of loan debt in Swiss francs.
Operating cash flow was EUR 2.9 million (previous year: EUR 2.6 million). This includes the change in net current assets of EUR –1.9 million (previous year: EUR –3.3 million). Investments amounted to EUR 2.3 million (previous year: EUR 0.8 million).
Working capital
22.4
EUR million
This result was achieved despite a further increase in working capital of EUR 2.4 million compared to the end of the previous year. Working capital rose again due to delivery problems in Gabon. Working capital is still far too high and ties up about EUR 8 million too much. As of the reporting date, working capital amounted to EUR 22.4 million. Inventories of logs and sawn timber increased by EUR 1.3 million. At EUR 12.0 million, accounts receivable were EUR 2.3 million higher than at the end of the year. Accounts payable increased slightly by EUR 1.3 million.
A few brief remarks summarizing the results in the individual companies: