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Obtala Hits Record Quarterly Contracted Sales, Timber Production

Thu, 5th Apr 2018 13:41

LONDON (Alliance News) - Obtala Ltd said Thursday it exceeded a quarterly record for contracted sales and export grade timber production as well as completing its production plans for its agri business in Tanzania.

The Africa-focused agriculture and forestry firm's contracted sales in the quarter ended March were USD8 million, with invoiced sales at USD3.9 million. It produced 3.6 million metres of export grade timber, a company quarterly record.

It is also in negotiation for an external trade finance facility of USD5 million for expansion of its timber trading unit which Obtala said is on track for first draw down during the second quarter of 2018.

Obtala was able to successfully raise USD6.4 million equity in the first quarter, including a 24% subscription from management.

It opened a new veneer factory in Gabon which it expects to commence production early in the second quarter. Obtala expects veneer to be its highest margin business line.

The company took delivery of two new bulldozers and three trucks, financed via the recent equity raise. This intake will also help increase output by about 20% at its Gabon sawmill.

Their new sawmill in Mozambique came online in its first quarter which also saw the arrival of a new Wood-Mizer processing equipment. Harvesting is not permitted in Mozambique from January to March, it said, but testing of production lines at the new sawmill is being conducted on timber harvested from concessions during the fourth quarter of 2017.

This year will see the start of Obtala's hybrid orchard model, where up to 500 hectares of mango saplings will be planted over future years. It has agreed to return the lease on 200 hectares of land back to a local partner.

Shares in Obtala were up 3.9% to 10.77 pence each Thursday midday.

Chairman Miles Pelham said: "Much hard work has been done and much has been achieved in Q1 2018. We have momentum throughout the group and I look forward to appraising you of our full results for the year ended December 2017, including a step-change in revenues, well in advance of providing our Q2 update."

By Paul McGowan;

Copyright 2018 Alliance News Limited. All Rights Reserved.

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