Group results
On track despite difficult environment
In the first half of 2024, Group sales amounted to EUR 26.3 million, and earnings before interest and taxes (EBIT) amounted to EUR -3.6 million or -13.5 %. The decline in sales amounted to 20.0 % compared to the same period of the previous year, and EBIT fell by EUR 3.4 million. The result is in line with expectations and reflects the persistently difficult market environment following the slump in the second half of the last year. On the other hand, a reduction in working capital of EUR 8.0 million was achieved, freeing up urgently needed liquidity. Working capital totaled EUR 16.8 million as at the reporting date (same period of the previous year: EUR 24.8 million). The operating business remains stable at a lower level and the restructuring measures introduced in the previous year have been completed. The sawmills in both Gabon and Brazil produced 35 % less sawn timber in the first six months than in the same period of the previous year. This was due to the low order intake and reduced production as a result of the restructuring program. Following the turbulence at the end of 2023, the focus was on stabilizing financial flows and liquidity in particular, and a positive operating cash flow was achieved. The Group’s net result in the first half-year was EUR -4.6 million (same period of the previous year: EUR -3.1 million). The outlook and expectations for 2024 remain cautious, as no significant recovery in the market environment is expected. From an operational perspective, the aim for the second half of the year is to continue to leverage the positive effects of the restructuring and to maintain liquidity at Group level. Strategically, refinancing debt capital by the end of the year remains the top priority.
| in EUR million | 30.06.24 | 30.06.23 | Index | Change | ||||
|---|---|---|---|---|---|---|---|---|
| Net Sales Precious Woods Group | 26.3 | 32.9 | 80.0% | –6.6 | ||||
| Net Sales Precious Woods Gabon | 19.2 | 19.3 | 99.3% | –0.1 | ||||
| Sawmills | 13.2 | 12.6 | 104.1% | +0.5 | ||||
| Net Sales Precious Woods Amazon | 5.1 | 8.4 | 60.1% | –3.4 | ||||
| Sawmills | 4.8 | 8.0 | 59.6% | –3.2 | ||||
| Net Sales Energy Biomass power plant | 0.2 | 1.5 | 10.8% | –1.4 | ||||
| Net Sales Precious Woods Trading | 1.9 | 4.5 | 42.1% | –2.6 | ||||
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The exchange rate effect on sales was 0.01 % compared to the same period last year.
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Net sales group
26.3
EUR million
Demand on the timber markets has only recovered slightly and timber prices remain under strong pressure. The order backlog at our plants reached its lowest point in autumn last year, after which there was a slight recovery, although this is only developing slowly. Cautious restraint prevails in the construction sector worldwide, even though the turnaround in interest rates is gradually becoming apparent. In Brazil, sawmill production was reduced by over 30 % as the 2023 harvest volume was reduced and there were still high stocks of sawn timber in storage. The sawmills in Gabon also produced around 35 % less, as incoming orders fell sharply, and market prices remain at an unattractive level.
The two veneer plants (CPL in Gabon – our 49 % holding) produced around 15 % less, partly due to ongoing technical difficulties. Sales of veneer processed via Precious Woods Holding Ltd. fell significantly by -48.5 % compared to the same period in the previous year.
EBITDA
-0.9
EUR million
Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to EUR -0.9 million (previous year: EUR 2.0 million), corresponding to a margin of -3.3 %. Earnings before interest and taxes (EBIT) reached EUR -3.6 million (previous year: EUR -0.2 million) and a margin of -13.5 %. The main reasons for this development are lower sales as well as the restructuring program, which resulted in significant cost reductions but in some cases had a delayed effect. In addition, efforts to reduce working capital and improve liquidity also meant that inventories had to be sold at a discount in some cases. The financial result totaled EUR -0.8 million (previous year: EUR -2.2 million). The current interest charge amounted to EUR 1.4 million (previous year: EUR 1.5 million). The exchange rate effect had a positive impact of EUR 0.6 million on the net result. The net result totaled EUR -4.6 million (previous year: EUR -3.1 million).
Equity ratio
23.8%
The equity ratio was 23.8 % on the reporting date (end of previous year: 36.8 %). Net debt increased by EUR 2.0 million from the end of the previous year to EUR 49.8 million. This is primarily due to the high level of loan debt in Swiss francs and the associated exchange rate effects. Negotiations on refinancing at the holding company are at an advanced stage and envisage an equity solution. We expect this to be finalized in the fourth quarter of 2024 at the latest.
Operating cash flow was EUR 1.1 million (previous year: EUR 0.9 million). This includes the change in net current assets of EUR 1.6 million (previous year: EUR -1.7 million). Investments amounted to EUR 1.6 million (previous year: EUR 1.4 million).
Working capital
16.8
EUR million
Working capital was reduced by EUR 8.0 million compared to the end of the previous year. This was an important contribution to providing liquidity for day-to-day business. As at the reporting date, working capital totaled EUR 16.8 million. Inventories of logs and sawn timber dropped by EUR 8.2 million. At EUR 11.3 million, accounts receivable were EUR 3.2 million lower than at the end of the year. Accounts payable decreased by EUR 3.3 million.
Results of the operating segments: