Woodbois Limited

("Woodbois", the "Group" or the "Company")

Half-year results for the six months to 30 June 2024 (unaudited)

Outlook for second half of 2024

Woodbois the African focused sustainable forestry, reforestation, carbon Sequestration, and timber trading company, announces its unaudited results for the half year ended 30 June 2024 and H2 Update

Highlights Financial

H1 2024 EBITDAS^1,2  $ (0.6)m versus H1 2023 $ (2.8m)

H1 2024 Group Gross Profit $ 1.8m versus H1 2023 $ 0.5m

H1 2024 Revenue : $ 3.64m versus H1 2023 $ 4.8m

H1 2024 working capital^1,3 $ 2.5m versus H1 2023 $ 9.0m

H1 2024 Group borrowing $ 4.1m versus H1 2023 $ 5.6m

Cash balance $ 0.7m as at 30 June 2024

Highlights Operations

H1 2024 sawn timber production 5,040 m3 versus H1 2023 3,700 m3

H1 2024 veneer production 1,840 m3 versus H1 2023 2,000 m3

Our veneer production suffered operational setbacks at the start of the year which caused the lower veneer production however these are now resolved and we are operating at a consistent and higher rate having addressed all previous issues.

Comment from Group CFO, Johannes Bloemen

"The first half of 2024 has been a period of continued transformation and operational restructuring for Woodbois. Despite the challenges we've faced, our financial performance reflects the progress made in stabilizing our operations and laying the groundwork for future growth."

Comment from Guido Theuns, CEO and Executive Chair:

"We are pleased to see the positive results of our restructuring efforts and cost-saving measures reflected in the first half of 2024. The turnaround in our financial performance demonstrates that we have successfully managed to 'turn the ship' and are now heading in the right direction. With the Company back on a stable footing, we are confident in our path towards profitability as we continue to optimize operations and drive growth across all divisions."

Enquiries:

Financial Review:

·      EBITDAS: Most notably, we achieved an improved EBITDAS of $(0.6)m, a significant turnaround from the $2.8m loss in H1 2023. This improvement reflects the success of our restructuring efforts and focus on enhancing margins, while also factoring in the proceeds from the sale of our Mozambique operations, as announced in our RNS of 13th March 2024 and 10th September 2024.

·      Gross Profit: Our gross profit improved to $1.8m from $0.5m in H1 2023, reflecting the effectiveness of our cost management and operational efficiency initiatives.

·      Revenue: Revenue for H1 2024 was $3.64m, compared to $4.8m in the same period last year We continue to restructure and optimize our operations. The improvements we have made so far are expected to drive better results in the second half of the year. Production levels and the corresponding revenue generation typically follow with a delay, as revenue is only recognized once the production is invoiced, which often occurs after the completion and delivery of the goods. Recognized revenue in H1 2024 includes $1.0m from the sale of Mozambique concessions.

·      Working Capital:  Working capital declined to $2.5m in H1 2024 from $9.0m in H1 2023, driven by our efforts to reduce inventory levels and improve collections on receivables, while carefully managing payables. It is important to note, however, that the comparison with H1 2023 provides an imperfect view, as the working capital at that time included new funds from a recent capital raise, and a large portion of bank debt was classified as non-current. We continue to commit to control  costs and streamline operations amid a lower revenue environment. We remain confident that these measures will contribute to long-term stability.

·      Borrowings: Our focus on reducing debt has paid off, with Group borrowings decreasing by 27% to $4.1m, down from $5.6m in H1 2023. This reduction is a testament to our commitment to deleveraging and building a stronger financial foundation for the future.

·      Cash Management: We maintained a cash balance of $0.7m at the end of H1 2024, demonstrating our disciplined approach to managing liquidity during this transitional period.

One of the biggest challenges during this transformation has been restructuring our finance organization, which was previously spread across four different countries, each operating with stand-alone systems and software packages. We believe we are now on the right path, as our financial systems are being implemented on a unified platform and fully integrated. This integration will ensure better transparency and financial control across the organization.

The board believe these results signal that Woodbois is on the right path. Our strategic emphasis on sustainability, operational efficiency, and financial discipline will continue to guide us as we move into the second half of the year, with stronger foundations for future growth and profitability.

Strategic Reorganization and Focus on Core Operations

2024 marked a decisive turning point for Woodbois as we executed a thorough reorganization of the Group. A key part of this has been the divestment of non-core assets, such as our Mozambique operations, which were sold in June. This sale enables us to concentrate on our core business in Gabon, where we continue to refine and optimize our production capabilities. By consolidating our administrative functions in Guernsey, Dubai, and Gabon, we have reduced overhead costs and positioned the Group for sustainable, long-term growth.

The restructuring of our Gabon operations has also been instrumental. We implemented a new management team and real-time controls, increasing operational efficiency and laying the groundwork for higher production outputs in the second half of 2024. We are pleased to report that despite these changes, we have maintained daily production levels comparable to the first half of 2023 and are on track to deliver significantly increased production outputs by year-end.

Financial Milestones and Trade Finance Facility

In June, we secured a $5 million trade finance facility from a family office in Dubai, which strengthens our trading capabilities and positions us to take advantage of new opportunities in the hardwood sector. This facility will allow us to expand trading volumes, enhance supply chain efficiencies, and commit to larger, more frequent transactions-key components in our strategy to drive profitability​. However, as set out in our update earlier in September, we are taking a cautious approach to third party trading, under stricter controls, therefore the finance facility remains in place but currently substantially undrawn at present.

We also raised £2 million through the exercise of warrants in February, a move that not only strengthened our cash position but also demonstrated shareholder's confidence in our future prospects. These funds have been fully received and directed toward scaling up production and further improving operational efficiencies.

Board and Leadership Changes

Our leadership team has seen significant changes during the first half of 2024.

We are pleased to announce the appointment of Mr. Adriaan Roecoert as Non-Executive Chair of the Company, effective immediately. Mr. Roecoert, who previously served as a Non-Executive Director (as announced on 27th June 2024), brings extensive expertise in international mergers and acquisitions. His experience is expected to significantly contribute to Woodbois' ongoing growth and strategic expansion.

During the Company's transition, the roles of CEO and Executive Chair were combined. However, as Woodbois moves into its next phase, focused on scaling up through organic growth while actively seeking merger and acquisition opportunities, separating these roles is seen as a strategic move to better serve the company's future objectives. Mr. Guido Theuns will continue in his role as CEO, focusing on operational leadership.

The complementary expertise of Mr. Roecoert and Mr. Theuns will empower Woodbois to accelerate its expansion plans and create value. Their combined leadership will provide the Company with sharper strategic focus and enhanced operational execution.

The Board believes that this development will strengthen governance and performance, further supporting Woodbois' growth ambitions.

We said farewell to Carnel Geddes (CFO) and Graeme Thomson (Independent Non-executive Director), who stepped down after years of dedicated service to Woodbois. Both have remained available for the handover as we bring in new talent to help drive our strategic objectives.

Johannes Bloemen was appointed CFO in August. He has been with the Group heading up and reorganising the Gabon finance function since early January 2024 and more recently has been assuming increasingly wider responsibility for the Group's finance function. Johannes has had a long career in senior financial positions in various complex municipalities, as well as providing accountancy and tax advice to other clients.

We are currently in the process of recruiting two additional Non-Executive Directors to complete and strengthen the Board, ensuring a balanced and diverse range of expertise to support the Company's strategic goals.

Operational Enhancements and Market Opportunities

Our focus on optimizing production and operational efficiency is already yielding results. In the first half of 2024, step by step we ramped up our production in Gabon, supported by investments in new machinery and an expanded workforce. With demand for our products remaining high, we have secured forward orders for timber and veneer, with key markets in the Middle East and Asia committed to purchasing all we can produce.

Additionally, we are doubling our drying capacity by installing new kilns and adding saw lines to boost output. These improvements, combined with renegotiated payment terms with customers, have enhanced our cash flow management and will further stabilize our financial position.

Carbon Credits

Woodbois' commitment to expanding its carbon credit initiatives, including our afforestation-project of 50,000 hectares (as announced 11th April 2023), presents a significant opportunity, particularly within the framework of Gabon's vast forest resources.

Woodbois, with its extensive existing forest concessions in Gabon, is uniquely positioned to leverage this opportunity. The process of registering these forest areas for carbon credits has already begun, and the Company expects to complete this within the next six months.

Outlook for the Second Half of 2024

Woodbois Limited expects a stronger performance for the full year ending 31 December 2024, driven by improved revenue in the second half, operational efficiency, and cost-saving measures. The Company anticipates maintaining profitability following an improved EBITDAS in H1, supported by increased production. Additionally, the completion of carbon credit registration will provide a new revenue stream for 2025, aligning with our sustainability goals. Overall, Woodbois is on track for solid financial results and continued growth by year-end.

Looking ahead, we have secured agreements that ensure all of our increasing production will be sold at normal market prices for the remainder of the year. This strategic alignment will help to reduce the cost of sales, allowing us to improve our margins and further enhance profitability.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 which forms part of UK law by virtue of the European Union (Withdrawal) Act 2018 ("MAR").

¹Non-IFRS measures

The Company uses certain measures to assess the financial performance of the company. These terms may be defined as "non-IFRS measures" as they exclude amounts that are included in, or include amounts that are excluded from, the most directly comparable measure calculated and presented in accordance with IFRS. They also may not be calculated using financial measures that are in accordance with IFRS. These non-IFRS measures include the Company's EBITDAS.

The Company uses such measures to measure and monitor performance and liquidity, in presentations to the Board and as a basis for strategic planning and forecasting. The directors believe that these and similar measures are used widely by market participants, stakeholders, and other interested parties as supplemental measures of performance and liquidity.

The non-IFRS measures may not be directly comparable to other similarly titled measures used by other companies and may have limited use as an analytical tool. This should not be considered in isolation or as a substitute for analysis of the Company's operating results as reported under IFRS.

² Earnings before interest, tax, depreciation, amortization, share based payments & other non-cash items

³Working capital comprises cash and cash equivalents, trade & other receivables, inventory less trade & other payable and provisions