In the first half of 2020, Precious Woods Holding's sales amounted to Euro 23.1 million, and earnings before interest and taxes (EBIT) amounted to Euro –0.4 million or –1.9%. Despite sales growth of 1.9 %, this represents a reduction in EBIT of Euro 1.8 million compared with the same period of the previous year. Along with other influences, the impact of the Covid-19 virus on operations, but also on sales markets, caused this drop in earnings.
At the veneer plant in Gabon, production could not resume as scheduled in January due to delays in technical maintenance. Strikes and transport problems also interfered with deliveries within Gabon. The lack of margins and the loss of production had a severe impact on EBIT for the first half of the year. The sawn timber volumes of all sawmills were about 2.3 % lower than in the previous year, while the production volumes of the veneer plant fell by only about 3.7 % despite the loss of production.
Operations in Brazil developed positively in line with expectations, and the exchange rate also developed to our advantage. The Group's net result was Euro –2.3 million (previous year: EUR –0.2 million). The generated cash flow enabled further investments in productivity. Debt remained at the year-end level. Working capital fell by about Euro 2.4 million but is still too high at 31.9 % of sales. Barring governments having to impose new Covid-19 lockdown measures, the outlook and expectations for 2020 as a whole is cautiously positive, given that the 2Q ended at least with a breakeven result.
The Group's gross profit was Euro 11.7 million, 12.3 % below the previous year period (Euro 13.4 million). The gross profit margin was 50.7 %, compared with 58.9 % in the previous year. The main reasons for this negative development are a lower sales price and additional personnel costs. Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to Euro 1.6 million (previous year: Euro 3.1 million), corresponding to a margin of 6.7 %. Earnings before interest and taxes (EBIT) reached Euro –0.4 million (previous year: Euro 1.3 million) and a margin of – 1.9%.
Precious Woods is an international company active in the sustainable management and use of tropical forests. The company’s core activities include sustainable management of tropical forests, timber processing and the trading of FSC-certified timber products.
