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Obtala expects good momentum seen in fourth quarter 2017 to result in record annual revenue

The firm is still considering a dual-listing in Asia as it continues to see strong interest from Asian-based investors interested in gaining exposure to timber and agriculture resources in Africa through a public vehicle
Logging
Obtala added that the Mozambique sawmill construction is on budget and expected to be operational in time for the cutting season

Obtala Limited (LON:OBT) said it expected the good momentum seen in the fourth quarter of 2017 to result in record annual revenue, with solid contributions from all its divisions - forestry production, timber trading and agriculture.

In a quarterly business update, the AIM-listed firm said, having seen the first step in expansion of its timber trading division with US$1mln loan capital from senior management, its external trade finance facility is on track for a first draw down in the first quarter of 2018.

READ: Obtala announces first step in expansion of timber trading division

The group said 11,000m3 (cubic metres) of logs were harvested in the fourth quarter and 3,500m3 of export grade timber produced, with forest production in Gabon up 63% since the acquisition of WoodBois.

Obtala added that the Mozambique sawmill construction is on budget and expected to be operational in time for the cutting season, and its veneer factory in Gabon is on track to commence production in the first quarter of 2018.                                

The company said it remains in dialogue with various funding bodies regarding specific projects to scale its agriculture businesses in East Africa.

It added that management is still considering a dual-listing in Asia as it continues to see strong interest from Asian-based investors interested in gaining exposure to timber and agriculture resources in Africa through a public vehicle.

READ: Obtala directors inject US$1mln into timber trading subsidiary

Miles Pelham, chairman of Obtala, said: "Significant time and capital was invested in H1 2017 installing a new operating team in each business, rationalizing corporate structure and building the infrastructure required to operate at scale.

“While the result will be a record year of revenue for the Group, this merely represents the initial phase of growth for the Company.”

He added: “I am excited for what 2018 will bring and fully expect it to be another year of exponential growth for the Group."

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"Don't get fixated on hurdles in Mozambique," is the message; it's a decreasing part of the business. Far more important is securing the trade finance that would enable the company to scale-up

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