RE: The New Obtala16 Jan 2018 18:16
Yes - quite the gripe.
A couple of things...
It's not 3500 m3 of timber that was produced in total, it's 3500 m3 of export grade (1st grade) timber produced. And what happens to timber after it's produced? It's SOLD. Before this however it can be turned in to even more profitable veneer...
Of every log, 25-30% is first grade at $350 per m3 ABSOLUTE MINIMUM.
On this, in the Q3 update I note "Prices for our main species have remained stable, with average realized sales price of $400 - $900 per m3 depending on species and grade." So probably more prudent to take an average of $500 per m3?
A further 30% of the log is 2nd grade timber, difference being the wood has a few more knots, more colour variation etc. This wood is also very desirable so even 2nd grade african exotic hardwood is very valuable. Once you've figured out the maths please note that this is only for 1 quarter.. AND was rainy season.. AND it doesn't include any timber trading OR agri.
In relation to planting etc., a company must pass a stringent validation process to get listed on the Social Stock Exchange, of which Obtala won Impact Company of the Year last year. A 5 year old could probably also read words in an rns... "The MOU signing took place took place in the presence of and with the support of representatives from the local government and the World Bank. A reforestation project is underway at Obtala's concession in Uap� to plant a range of indigenous species, including Chanfuta, Umbila and Pau Ferro. 10,000 tree-seeds will be planted by the end of 2018. Jessica's team are also working with the timber trading division in the Ivory Coast with a view to expanding the reporting metrics within our responsible wood procurement program. In addition to these key projects, activities have been taking place on a daily basis across all of our businesses, deepening our relationships with the communities we operate in. These include electrification projects and infrastructure upgrades for local schools, sponsorship of sports teams and food donations to hospitals and orphanages."
If by "keep changing plans" you mean rapidly expanding, then yes they keep changing plans.
The money raised last year has been spent on the core infrastructure which can accommodate the planned ramp up in production going forward. In my view, management has done everything they said they would and more (lucrative Woodbois acquisition - another conservative $15 million revenue yearly). 2017 was the year of transformation, 2018 is the year we will begin to see the fruits (pun intended).
Very much looking forward to seeing next set of figures.
All IMHO.
Sign In
Follow the stocks
