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annual report/Sustainable Forestmanagement
26.04.2012
- Operating result (EBITDA) substantially improved to USD -2.1 million
- Turnaround measures are taking effect and will have a positive impact on
2012 results
- Harvestable forest area in Brazil increased by 105 000 hectares to 300
000 hectares
- Hardwood sawmill for "bois divers" at Precious Woods Gabon expanded
- Debt reduced and bank loans repaid thanks to partial divestment of
Precious Woods Central America
Zug/Zurich, 26 April 2012 - As the turnaround strategy nears completion, the
Precious Woods Group looks to the future with confidence. The measures to
improve productivity and the market position are taking effect. Despite
logistical problems caused by external factors, business prospects in Gabon
remain intact. In Brazil, major issues from the past have been resolved. The
Group reviewed its sales strategy at the end of 2011 and decided to centralize
the sales organization in Switzerland from the beginning of 2012. The Precious
Woods Group achieved sales of around USD 69 million in the year under review. On
a comparable basis - i.e. without Precious Woods Central America (PWCA), which
has been classified as a "discontinued operation" following the partial
divestment - this figure is almost in line with the previous year's level. At
USD -2.1 million in 2011, the operating result (EBITDA) is within the range
communicated in November 2011. Compared to the previous year (on a like-for-like
basis), this equates to an improvement of USD 7.7 million. At USD -41.5 million,
total results from continuing operations improved substantially, by USD 30.2
million year-on-year, despite the net negative impact of USD -14.5 million
resulting from the partial divestment of PWCA and its consequent treatment as a
discontinued operation. In summary, the 2011 reporting year saw major steps
towards economic sustainability. In 2012, Precious Woods looks set to post
positive EBITDA for the first time in a considerable period.
Precious Woods Holding Ltd: central sales organization and maintaining liquidity
At the end of 2011, a centrally managed sales organization out of Switzerland
was established, which became operational at the beginning of 2012. This move
will optimize the product and client portfolio, improve margins and increase
market shares in the emerging markets. These activities will have a positive
impact on the Group from the second half of 2012. The partial divestment of
Precious Woods Central America enabled all bank debt at holding level as well as
shareholder loans totalling EUR 5 million to be repaid. New shareholder loans
amounting to USD 11 million will further secure liquidity.
Precious Woods Gabon: significant contribution to business development
The expansion of production capacity at the "bois divers" sawmill in July 2011
established the basis for future growth. At the same time efforts are being made
to extend the concession basis. Optimization work at the new sawmill, inventory
adjustments and logistical challenges created by external factors such as
capacity bottlenecks in the Port of Libreville prevented improvements of EBITDA
which, at USD 6.9 million, was slightly below the previous Year's figure of USD
7.2 million.
Precious Woods Amazon: systematically resolving the situation in Brazil
Harvestable forest area was increased by 105 000 hectares to around 300 000
hectares, some 64% of the total forest owned by Precious Woods. Despite strong
sales on the local market, exports fell below expectations in the first half of
the year due to unusually heavy rainfall. The Kanban system was introduced at
the end of 2011 in order to optimize harvesting and warehousing processes and
reduce warehousing costs. Headcount was cut by 131. As in 2010, the measures had
a negative impact on costs in 2011, albeit much smaller than in the previous
year. Set against sales of USD 14.7 million, the cost basis was still too high.
EBITDA improved by
USD 9.5 million to USD -1.7 million at the end of 2011.
Precious Woods Europe: improved cost base for 2012
Precious Woods Europe faced a difficult market environment during 2011,
resulting in an 8% decline in sales to USD 21.5 million. The restructuring and
optimization measures, combined with a reduction in the workforce, were
continued during the year. These will improve the cost base and will begin to
feed through into results in 2012. The greater emphasis on market orientation
due to the new sales organization will also have a positive impact on results
this year. Precious Woods Europe's EBITDA improved by USD 1.8 million compared
to the previous year. Because of severance payments and inventory write-downs,
however, 2011 EBITDA was still negative, at USD -1.8 million.
Carbon & Energy: EBITDA improved
Energy production was around 20% below the normal level in the first half of the
year, due to exceptionally heavy rainfall and the related drop in wood waste
volumes. Nevertheless, sales rose by 8% to USD 5.9 million. In March 2011
Precious Woods received the Certified Emission Reductions (CERs) for 2009
generated from the power plant, the sale of which led to income of USD 0.9
million. EBITDA stood at USD 2.6 million (2010: USD 0.7 million). As part of the
cash-neutral debt restructuring with the minority shareholder in the power
plant, Precious Woods will transfer 40% of its shares in the plant to the
minority shareholder as of 1 April 2012, and will thereafter retain a 40%
shareholding. For this reason, the power plant will no longer be consolidated.
Precious Woods Central America: commitment remains despite 75% divestment
The partial divestment of forestry activities in Central America enabled the
holding company's outstanding debts to be repaid while maintaining liquidity.
The PWCA segment has now been reclassified as a "discontinued operation" in
order to ensure comparability between the 2011 and 2010 figures. The Chairman of
the Board of Directors of Precious Woods Holding is represented in the Board of
PWCA, and the constructive collaboration continues.
Social and ecological sustainability: the company compass of Precious Woods
Throughout the turnaround phase, Precious Woods has remained committed to its
goal of creating social, environmental and economic added value simultaneously.
In 2011 further staff reductions were necessary, chiefly in Brazil and at
Precious Woods Europe; these were conducted on fair terms and within the
statutory framework. The outcome has been to safeguard the jobs of the remaining
employees and to ensure that they continue to receive fair pay and social
security benefits.
Outlook: strengthening the Group Management
The balance sheet structure of the Precious Woods Group remains solid - as
evidenced by an equity ratio of over 49% - and the Group is therefore well
equipped to absorb the loss generated last year. There are no plans to take on
further debt. Group Management will be strengthened by the arrival on 1 May 2012
of Stefan Meinhardt as Chief Commercial Officer. He will be responsible for
global sales, which are now being run centrally from Switzerland. Based on the
measures implemented, the Board of Directors and Management are confident that
operational progress will lead to a marked improvement in results in 2012.
Annual General Meeting 2012
The Annual General Meeting will take place on Thursday, 24 May 2012, at 3.15
p.m. in the Metropol, Fraumünsterstrasse 12, Zurich. Invitations to the Annual
General Meeting, together with the full agenda and the proposals of the Board of
Directors, will be published on 3 May 2012 in the Swiss Official Gazette of
Commerce (SOGC) and on the Precious Woods website.
The full Annual Report is now available for download from the website
www.preciouswoods.com.
end of ad-hoc-announcement
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Precious Woods is an international company active in the sustainable management
and use of tropical forests. The companys core activities include reforestation
and sustainable management of tropical forests, timber processing and the
trading of FSC-certified timber products. The generation of emission rights and
electricity from wood waste represent further integral elements of the companys
business. Shares of Precious Woods Holding Ltd have been listed on the SIX Swiss
Exchange since March 2002. Additional information about Precious Woods can be
found at www.preciouswoods.com.
Further inquiry note:
Precious Woods Holding AG
Brunhilde Mauthe
Head of Group Communications & Marketing Services
Tel. +41 44 245 81 20
Fax +41 44 245 81 12
media@preciouswoods.com
end of announcement euro adhoc
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issuer: Precious Woods Holding Ltd.
Baarerstrasse 79
CH-6301 Zug
phone: +41 44 245 80 10
FAX: +41 44 245 80 12
mail: office@preciouswoods.com
WWW: http://www.preciouswoods.com
sector: Forestry & Timber
ISIN: CH0013283368
indexes: SPI
stockmarkets: Main Standard: SIX Swiss Exchange
language: English