The Precious Woods Group achieved a sales growth of 3% in 2018. The operating income was negatively impacted by extraordinary expenses in Brazil, caused by past events, and delivery difficulties in both Gabon and Brazil, as the company says in the press release received by Lesprom Network.
During financial year 2018 Precious Woods experienced significant shipping problems from Brazil in the first half of the year, and from Gabon during the second half of the year. While the situation in the port of Manaus normalized starting from June, a lack of containers and port access in Gabon affected the export of our production volumes from September onwards.
Due to the missing turnover of around Euro 3 million and the resulting lower margins, the operating result in Gabon declined compared to the previous year. The operating result in Brazil increased considerably; however, this result was negatively impacted by one-off charges attributable to legal cases from 2008 to 2013. Management believes that no major outstanding legal cases can impact future results.
Working capital has worsened again due to the delivery delays mentioned above and amounts to 35.5% of net sales (regular level 27%). This resulted in an additional capital commitment of Euro 5 million. In 2019, the focus will be on increased processing volumes at both locations and investment in production capacity. This will increase sales and profitability.
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.
