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HomeMarketNordic Fibreboard AS unaudited results for first quarter of 2023

Nordic Fibreboard AS unaudited results for first quarter of 2023

MANAGEMENT REPORT

Consolidated net sales for Q1 2023 were € 2.60 million, which remained at the same level compared to the same period last year (Q1 2022: € 2.60 million). The main business area is the production and wholesale of fibreboard, which recorded sales in Q1 2023 of € 2.59 million (Q1 2022: also € 2.59 million). The remaining business area is real estate management of the property owned in Suur-Jõe street in Pärnu, who recorded sales of € 0.01 million in Q1 2023 (Q1 2022: also € 0.01 million).

The consolidated EBITDA of Nordic Fibreboard AS for Q1 2023 was negative € 94 thousand (Q1 2022: positive € 255 thousand). EBITDA margin was negative 4% in Q1 2023 (Q1 2022: positive 10%). However, the Group’s gross margin fell from 25% for Q1 2022 to being 11% in Q1 2022, the main reason for the decrease in the gross margin was the substantial increase in pricing of woodchips and energy, the company`s main input costs.

In the first quarter of 2023, demand in the fibreboard business was lower than expected, which led Nordic Fibreboard Ltd to postpone the restart of the production with 7 weeks after its usual year-end maintenance period. This prolonged stoppage period led to EBITDA being negative in both January and February, while finally turning positive in March month. Due to the company’s volume commitment to its electricity supplier, the long stoppage of the factory resulted in having to resell volume commitment back to the electricity supplier, resulting in an extraordinary loss of € 407 thousand. The electricity contract was cancelled on 31.3.2023, and a new less onerous electricity contract came into force on 01.04.2023. 

The consolidated operating loss of Nordic Fibreboard AS for Q1 2023 was € 623 thousand, which includes the one-time extraordinary loss from the resale of electricity (Q1 2022: operating profit € 255 thousand).

Financial income in Q1 2023 was positively affected by an increase of € 74 thousand in value of the shares owned by Nordic Fibreboard in the real estate company Trigon Property Development (TPD), listed on the stock exchange Nasdaq Tallinn. The shares were valued at € 644 thousand at start of Q1 2023, and ended up being valued at € 718 thousand at end of Q1 2023 (in Q1 2022, the shares value increased with € 52 thousand).

Group`s consolidated net loss therefore for Q1 2023 was € 597 thousand (Q1 2022: profit € 152 thousand).

DIVISIONAL REVIEW

REVENUE BY BUSINESS SEGMENTS

€ thousand Q1 2023 Q1 2022
Fibreboards production and sales 2,585 2,591
Real Estate Management 12 9
TOTAL 2,597 2,600

PROFIT BY BUSINESS SEGMENTS

€ thousand Q1 2023 Q1 2022
EBITDA by business units:    
Fibreboards production and sales (76) 279
Real Estate Management (13) (10)
Group transactions (5) (14)
TOTAL EBITDA (94) 255
Depreciation (122) (121)
Extraordinary other operating expense (407)* 0
TOTAL OPERATING PROFIT/ LOSS (623) 134
Net financial costs 26 18
NET PROFIT/ LOSS (597) 152

* consists of the one-time loss received from the resale of electricity to the electricity company.

NORDIC FIBREBOARD LTD: FIBREBOARD PRODUCTIONS AND SALES

Fibreboard sales for Q1 2023 were € 2.59 million (Q1 2022: also € 2.59 thousand). Sales did improve during the 3 months, up from being € 792 thousand in January, to € 836 thousand in February, and to € 957 thousand in March. The inventory build-up at end of 2022 enabled sales during Q1 2023 to reflect orders received despite the production standstill period. Sales to the company’s main markets in European Union increased during Q1 with € 196 thousand compared to one year earlier, negating the impact of ending sales to Russia customer, as a result of sanctions against Russia for their unlawful war in Ukraine.

The consolidated EBITDA of Nordic Fibreboard Ltd OÜ for Q1 2023 was negative € 76 thousand (Q1 2023: positive € 279 thousand). The reason for the drop in EBITDA is mainly more expensive raw material prices in the Q1 2023 compared to the Q1 2022.

 FIBREBOARD SALES BY GEOGRAPHICAL SEGMENTS

€ thousand Q1 2023 Q1 2022
European Union 2,455 2,259
Africa 53 0
Asia 31 41
Russia 0 269
Middle East 0 13
Other 46 9
TOTAL 2,585 2,591

PÄRNU RIVERSIDE DEVELOPMENT: REAL ESTATE MANAGEMENT

Pärnu Riverside Development owns the property located at Suur-Jõe 48 in Pärnu. The property has some rental tenants and rental income from real estate management was € 12 thousand in Q1 2023, (Q1 2022: € 9 thousand).

The real estate management EBITDA for Q1 2023 were negative € 13 thousand (Q1 2022: negative € 10 thousand).

STATEMENT OF FINANCIAL POSITION AND CASH FLOW STATEMENT

As of 31.03.2023 the total assets of Nordic Fibreboard AS were € 9.4 million (31.03.2022: € 8.6 million). The liabilities of the company as of 31.03.2023 were € 4.9 million (31.03.2022: € 4.6 million), of which Group has payables of € 1.2 million as at 31.03.2023 (31.03.2022: € 0.8 million) and borrowings of € 3.1 million as at 31.03.2023 (31.03.2022: € 3.2 million).

Receivables and prepayments amounted to € 1.3 million as at 31.03.2023 (31.03.2022: € 1.4 million). Inventories were € 0.8 million as of 31.03.2023 (31.03.2022: € 0.4 million). Fixed assets were € 7.2 million as of 31.03.2023 (€ 6.7 million as of 31.03.2022).

During 2023 Q1, the Group’s cash flows from operating activities totalled € 166 thousand (2022 Q1: € 78 thousand). Investment activities resulted in cash outflows in amount of € 80 thousand in 2023 Q1, which was due to improvements in production machinery (2022 Q1: outflow € 98 thousand). Financing activities also resulted in cash outflows of € 41 thousand in Q1 2023 (2022 Q1: cash outflow € 35 thousand). Net cash effect during 2023 Q1 cash inflow of € 45 thousand (2022 Q1: cash outflow € 55 thousand).

OUTLOOK

NORDIC FIBREBOARD LTD

The overall demand picture appears subdued, and the outlook remain uncertain. Increasing interest rates, global economic uncertainty and the ongoing war in Ukraine all have led to lack of confidence among end users of building materials, including the company’s fibreboards.

Main operation issue remains the ongoing preparation of upgrading the company’s wood-based boiler house in Pärnu so to meet the new emission requirements coming into force in 01.01.2025

PÄRNU RIVERSIDE DEVELOPMENT

We will continue to manage and develop the property on Suur-Jõe Street 48, Pärnu. A detail plan for the property is ongoing, with the intention of converting the property into a private residential property.

FINANCIAL HIGHLIGHTS

€ thousand    
Income statement Q1 2023 Q1 2022
Revenue 2,597 2,600
EBITDA (94) 255
EBITDA margin (4%) 10%
Operating profit (623) 134
Operating margin (24%) 5%
Net profit (597) 152
Net margin (23%) 6%
     
Statement of financial position 31.03.2023 31.03.2022
Total assets 9,368 8,580
Return on assets (6%) 2%
Equity 4,487 4,002
Return on equity (13%) 4%
Debt-to-assets ratio 52% 53%
     
Share 31.03.2023 31.03.2022
Last Price (€)* 1.52 1.83
Earnings per share (€) 0.11 0.18
Price-earnings ratio 14.05 10.25
Book value of a share (€) 1.00 0.89
Market to book ratio 1.52 2.06
Market capitalization (€ thousand) 6,816 8,233
Number of shares (piece) 4,499,061 4,499,061

EBITDA = Earnings before interest, taxes, depreciation and amortization
EBITDA margin = EBITDA / Revenue
Operating margin = Operating profit / Revenue
Net margin = Net profit / Revenue
Return on assets = Net profit / Total assets
Return on equity = Net profit / Equity
Debt-to-assets ratio = Liabilities / Total assets
Earnings per share = Trailing twelve months (TTM) net profit / Total shares
Price-earnings ratio = Last price / Earnings per share
Book value of a share = Equity / Total shares
Market to book ratio = Last price / Book value of a share
Market capitalization = Last price * Total number of shares
*http://www.nasdaqbaltic.com/

Consolidated statement of financial positions

€ thousand 31.03.2023 31.12.2022 31.03.2022 31.12.2021
Cash and cash equivalents 47 2 2 57
Receivables and prepayments (Note 2) 1,272 559 1,401 902
Inventories (Note 3) 842 1 672 436 390
Total current assets 2,161 2,233 1,839 1,349
         
Investment property (Note 4) 1,859 1,859 1,152 1,152
Financial assets at fair value through profit or loss (Note 7) 718 644 696 644
Property, plant and equipment (Note 5) 4,628 4,670 4,890 4,915
Intangible assets (Note 6) 2 2 3 3
Total non-current assets 7,207 7,175 6,741 6,714
         
TOTAL ASSETS 9,368 9,408 8,580 8,063
         
Borrowings (Note 8) 477 290 114 146
Payables and prepayments (Note 9) 1,617 1,014 1,234 829
Short-term provisions (Note 10) 13 18 14 19
Total current liabilities 2,107 1,322 1,363 994
         
Long-term borrowings (Note 8) 2,647 2,875 3,071 3,074
Long-term provisions (Note 10) 127 127 145 145
Total non-current liabilities 2,774 3,002 3,216 3,219
Total liabilities 4,881 4,324 4,578 4,213
         
Share capital (at nominal value) (Note 11) 450 450 450 450
Statutory reserve capital 45 45 0 0
Retained earnings (loss) 3,992 4,589 3,552 3,400
Total equity 4,487 5,084 4,002 3,850
         
TOTAL LIABILITIES AND EQUITY 9,368 9,408 8,580 8,063

*The notes to the financial statements presented on pages 14 to 24 are an integral part of these consolidated financial statements.

Consolidated statement of profit or loss and other comprehensive income

€ thousand Q1 2023 Q1 2022
Revenue (Note 13) 2,597 2,600
Cost of goods sold (Note 14) 2,435 2,060
Gross profit 162 540
     
Distribution costs (Note 15) 233 284
Administrative expenses (Note 16) 139 121
Other operating income (Note 18) 0 0
Other operating expenses (Note 18) 413 1
Operating profit (loss) (623) 134
     
Finance income (Note 19) 74 52
Finance costs (Note 19) 48 34
PROFIT (LOSS) BEFORE INCOME TAX (597) 152
     
NET PROFIT (LOSS) FOR THE PERIOD (597) 152
     
Basic earnings per share (Note 12) (0.13) 0.03
Diluted earnings per share (Note 12) (0.13) 0,03

*The notes to the financial statements presented on pages 14 to 24 are an integral part of these consolidated financial statements.

 TORFINN LOSVIK
Chairman of the board
Phone: +372 56 99 0988
torfinn.losvik@nordicfibreboard.com

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