Income statement

Total income

The 2023 fiscal year was marked by a deep crisis in the construction supply industry. Demand on the timber markets deteriorated dramatically in the second half of the year, with timber prices falling to a lower level. The crisis in the construction sector due to the turnaround in interest rates and the associated construction loan crisis in Asia as well as the political unrest at production locations – but also in sales markets – further exacerbated the situation. The average prices of the order backlog in the first half of the year were still at the previous year’s levels, but in light of the increase in price pressure, new orders were below the previous year’s prices. In Brazil, production in the forest and sawmill continued to fall due to a lack of orders. Moreover, the Amazon River carried so little water at the end of the year that shipments came to a temporary standstill. This led to a prolonged interruption in deliveries. The further weakening of the EUR and USD against the Brazilian real resulted in higher consolidation costs and lower income in local currency. On 30 August 2023, a military coup took place in Gabon against the backdrop of the country’s political tensions. President Ali Bongo Ondimba, whose election victory had been announced the day before, along with his entire government, were declared deposed, and Brigadier General Brice Clotaire Oligui Nguema was appointed interim president. This led to a temporary interruption of the local economy, especially in the Gabon Special Economic Zone, which in turn resulted in a standstill of supplies in the local sales market and consequently to high inventories, especially of logs. The consequences included liquidity bottlenecks and increased inventory costs. In addition, the night-time curfew imposed following the military coup meant that for about six weeks, sawmills were only able to work one shift.

The two veneer plants (CPL in Gabon – our 49 % stake) produced about 23 % less due to the partial interruption in the supply of logs and the fact that no work was carried out from 14 August to 10 September due to the upcoming elections. At the end of 2022, fuel prices in Gabon increased by almost 100 % in total over the previous year and are currently still at a very high level. Shipping costs per container also remained at a very high level for almost the entire year in both Gabon and Brazil. Due to the acute crisis, drastic measures had to be taken, and an extensive restructuring programme was initiated, which was largely completed in 2023. The measures primarily involve a reduction in the number of employees from 1 550 to 1 259. The associated one-off personnel costs amounted around to EUR 1.3 million.

The combination of the decline in sales and the rapid implementation of the restructuring measures resulted in a severe worsening of the already tense liquidity situation. Measures had to be taken at all possible levels to stop the outflow of funds and to generate additional cash. These measures have been effective, and the situation was stabilized at a low level by the end of the year.

Operational costs

Production costs increased disproportionately due to negative economies of scale and amounted to 64 % of sales, compared to 40 % in the previous year. Despite one-off effects, personnel costs fell by EUR 1.6 million, or 7 %, as a result of the restructuring measures.

Operating result (EBITDA)

Financial result

Net result

Outlook for 2024

With our newly established cost structure, we have created the basis for significantly reducing our loss in 2024 despite the expected decline in sales, even under the difficult conditions of the ongoing crisis in the timber and construction industry, and we aim to break even at an operating level. The strategic objective includes stabilizing day-to-day business at a low level so that the necessary replacement investments can be made. We want to fulfil our mandate for profitable growth, even though external debt in relation to EBITDA is still very high. At the same time, the refinancing of existing loans remains a major challenge. We expect increased profitability in Gabon and Brazil in 2024 because we were able to implement most of the restructuring effects in 2023. We remain very cautious in our assessment of the market situation, in part due to the high interest rates affecting the construction industry and the fact that consumer sentiment is still subdued. Building and using wood is and will remain a trend, also due to the potential and climate contributions that wood can make as a construction material. We therefore expect a fiscal year that marks a turnaround towards a financially healthy company focused on its core tasks, able to withstand the upheavals of the global markets and create added value for customers and shareholders – in addition to our mandate of having a positive impact on the environment and society.