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").

11 April 2023

 Woodbois Limited 

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

Q1 2023 Update

Operational

·    Confirmation of conditional grant of 50,000 hectares received from Government of Gabon for first voluntary carbon credit afforestation project, as announced separately today.

·    Shipping - Own production goods shipped in Q1 2023 increased 10% from Q1 2022.

·    Veneer production of 1,400m³ in Q1 2023 vs 1,100m³ in Q1 2022, an increase of 27%.

o  Gradual increase in production volumes with testing of production combination between original and recently commissioned lines ongoing.

·    Sawmill production of 1,800m³ in Q1 2023 vs 4,200m³ in Q1 2022, a decline of 57%.

o  The shut-down planned for later in 2023 to allow for implementation of re-ordering of work-flows and processes was brought forward to February-March since abnormal weather conditions were causing supply chain disruption between forest and sawmill. The significant increase in production volumes during 2022 had put pressure on warehouse storage space and the down-time was also used to reduce inventory and free up space.

o  Further efficiency and cost reduction measures to allow for additional, profitable growth are planned, including some reconfiguring of production lines, but these are anticipated to be implemented during the annual closures in December 2023

·    External contract for consolidated forest management plan mandated with work underway, providing next critical step towards certification.

Financial

·    Q1 2023 own production sales of $3.0m vs $2.75m in Q1 2022

·    As announced in October 2022 the Group had been reducing exposure to third party trading in Q4 2022 and this extended into a temporary pause in Q1 2023 owing to potentially sub-optimal margins and working capital constraints

·    Pause in third party trading contributed to total Q1 2023 revenue of $3m being reduced by 45% vs. Q1 2022

·    Total revenue for full year 2023 expected to exceed 2022: focus on margins and profitability

·    Q1 2023 gross profit margin 25%, in line with 2022

·    Cash balance $4.6m as at 31^st March 2023, post $3.4m net placing

·    Period end working capital¹ of $10.4m of which inventory was $2.6m and excluding bank and other loans of $14.1m

·    Company exploring sale and leaseback of its two unencumbered real-estate production sites in Gabon valued at $15m in 2021

·    Company currently expects to deliver further growth in profitability and to achieve positive operational cash flow during 2023

Financing

On 13 March 2023 the Company raised net proceeds of approximately $3.4m by way of a placing of 250m new ordinary shares in the Company at a price of 1.2 pence per share. Novum Securities Limited acted as broker and placing agent in respect of the Placing which was to new institutional and other investors. The Placing Shares represented 10 per cent of the existing issued Ordinary Share capital of the Company prior to the fundraise.

The Company has mandated a real estate broker in Gabon to explore the potential for a sale and lease-back of its unencumbered 14 hectares of real-estate production sites in Mouila, Gabon. These were independently valued at $15m in May 2021. This could enable the Company to reduce some of its more expensive debt, to allocate additional capital to business lines with the highest anticipated IRRs and fund initial work on its afforestation project.

The Company expects to repay its $1.0m loan from Lombard Odier by mid-year and to hold discussions with the holders of its $0.7m of convertible loan stock with a view to extending its term or conversion.

Carbon division

Our climate change carbon strategy has been developed with the express intention of providing long-term profitable benefits to all stakeholders. We are confident having conditionally been allocated 50,000 hectares in Gabon for our initial large-scale afforestation project that various sources of project funding dedicated to climate change mitigation in the region will be attracted by the quality of this initial project. A separate RNS released today sets out more details of this project.

CEO Paul Dolan said:

"Our priorities for 2023 are clear:

Deliver a first-class service and superior product to our customers in order to generate consistent, positive cash-flow from our core business while completing the capex and works necessary to achieve full certification for our forests and factories;

We also aim to complete the necessary lease agreements on our afforestation project thereby allowing us to commence its first phase, as well as to progress its funding;

Build a higher-margin third-party trading pipeline and scale-up as and when we receive appropriate market signals and secure access to appropriate trading capital;

Appoint a new non-executive director to help in our development.

As always, we therefore have a very busy period ahead. Whilst staying continually alert to ongoing geo-political and macro-economic uncertainties, we also have an exciting year of growth and opportunities to look forward to."

¹ Working Capital is a non-IFRS measure and consists of Cash, plus Inventory, plus Receivables, less Payables.

For further information contact:

Enquiries:

Background on Woodbois

Woodbois Limited (AIM:WBI) is an African-focused forestry company, divided into three distinct, but highly complementary divisions comprising the production and supply of sustainable African hardwood products, the trading of timber and timber products, and a reforestation and carbon credit division.

Woodbois' forestry division has production facilities in Gabon and Mozambique, managing a total of c470,000 hectares of natural forest concessions. The trading division comprises an experienced team of timber specialists, who source and supply sustainable timber to a global customer base. Its proprietary technology developed in-house, captures, stores and presents data, providing a matching engine to build scale and optimise trading opportunities with its global customer base.

The Company's carbon sequestration and trading division aims to generate voluntary carbon credits for corporate partners through the delivery of large-scale reforestation projects. The conditional lease announced today is its first project.

The Company's focus on the transparency and sustainability of its timber operations has been recognised by The Zoological Society of London, which ranked Woodbois joint eighth in its Sustainability Policy Transparency Toolkit ('SPOTT'') ESG policy transparency assessments for the worldwide timber and pulp industries for 2022.

The Company agreed a new partnership with World Forest ID, which will enhance the traceability and identification of timber, originating from the company's forest concessions in Gabon. World Forest ID is an international organisation which is revolutionizing the protection of forests through the application of science-based origin tracing and species identification. World Forest ID is building an extensive global library of reference samples, from various forest regions, for use in cross verification.

Please follow the Company on Twitter: @WoodboisLtd