Announcement View
Company Nordic Fibreboard AS
Type Company Release
Category Management interim statement or quaterly financial report
Publicize date 22 Nov 2022 08:00:00 +0200
Attachments
NORDIC FIBREBOARD AS_Interim Report Q3 2022.pdf
NORDIC FIBREBOARD AS_Vahearuanne 2022 3. kvartal.pdf
Languages
Kell English
Currency
Title Unaudited financial results of Nordic Fibreboard AS for the third quarter of 2022
Content
MANAGEMENT REPORT

Consolidated  net  sales  for  Q3  2022 were  EUR  2.79 million  (Q3 2021: EUR 2.33
million).  The main business area is the production and wholesale of fibreboard,
which  recorded sales in Q3 2022 of  EUR 2.78 million, an increase of 23% compared
to  Q3  2021. The  remaining  business  area  is  real  estate management of the
property  owned in Suur-Jõe street in Pärnu,  who recorded sales of EUR 9 thousand
in Q3 2022 (Q3 2021: 65 thousand).

The  reason for the increase  in sales revenue in  Q3 2022 for Nordic Fibreboard
Ltd  was the  ongoing strong  demand for  building materials in the construction
sector, as reflected in both volume growth and price increases. That being said,
towards  the end of Q3  2022 we started to see  a reduction in customers orders,
reflecting  the softening of  business confidence as  a result of negative macro
factors,  such  as  increasing  interest  rates,  energy crisis, and higher food
prices.  As a  result of  these sentiments,  Nordic Fibreboard is announcing the
layoff  of 8 production workers and is therefore reducing production capacity to
keep up with the decline in demand.

The consolidated EBITDA of Nordic Fibreboard for Q3 2022 was EUR 193 thousand, the
EBITDA  margin was 7% (Q3 2022: EBITDA was  EUR 356 thousand and the EBITDA margin
was  15%).  Compared to the Q3 2021 the Group`s gross margin decreased from 32%
to  19% in the Q3 2022. The main reason  for this reduction in profitability was
due  to  the  sharp  increase  in  raw  material costs, ie woodchips and energy,
experienced during Q3 2022, which more than offset our price increases.

Total  financial income of EUR 49 thousand  was recorded in Q3 2022, which consist
of  the profit from the revaluation  of Trigon Property Development (TPD) shares
in  the amount of EUR 79 thousand and  the interest expense of loan obligations in
the  amount of EUR 30 thousand. In Q3 2021, the financial cost was EUR 159 thousand,
which consisted of the loss of EUR 128 thousand from the revaluation of TPD shares
and the interest expense of loan obligations in the amount of EUR 31 thousand.

Group`s  consolidated net profit for Q3 2022 was EUR 117 thousand (Q3 2021: profit
EUR 73 thousand).

DIVISIONAL REVIEW

Revenue by business segments

                                        EUR thousand     |    EUR thousand
                                   ----------+---------+---------+---------
                                     Q3 2022 | Q3 2021 | 9M 2022 | 9M 2021
---------------------------------------------+---------+---------+---------
  Fibreboards production and sales     2,782 |   2,270 |   9,015 |   7,539
---------------------------------------------+---------+---------+---------
  Real Estate Management                   9 |      65 |      28 |     218
---------------------------------------------+---------+---------+---------
  TOTAL                                2,791 |   2,334 |   9,043 |   7,757

Profit by business segments

                                        EUR thousand     |    EUR thousand
                                   ----------+---------+---------+---------
                                     Q3 2022 | Q3 2021 | 9M 2022 | 9M 2021
---------------------------------------------+---------+---------+---------
  EBITDA by business units:                  |         |         |
---------------------------------------------+---------+---------+---------
  Fibreboards production and sales       201 |     344 |   1,114 |   1,337
---------------------------------------------+---------+---------+---------
  Real Estate Management                 (6) |      11 |    (18) |      10
---------------------------------------------+---------+---------+---------
  Group transactions                     (2) |       1 |    (25) |     (5)
---------------------------------------------+---------+---------+---------
  TOTAL EBITDA                           193 |     356 |   1,071 |   1,341
---------------------------------------------+---------+---------+---------
  Depreciation                         (125) |   (123) |   (372) |   (380)
---------------------------------------------+---------+---------+---------
  TOTAL OPERATING PROFIT                  68 |     232 |     699 |     962
---------------------------------------------+---------+---------+---------
  Net financial income/ costs             49 |   (159) |    149* |   267**
---------------------------------------------+---------+---------+---------
  NET PROFIT                             117 |      73 |     848 |   1,229

*  Includes financial income of  EUR 143 thousand in the  first 9 months of 2022,
received from the revaluation of the shareholding owned by the group in the real
estate  development company  Trigon Property  Development AS,  and the dividends
received from these (TPD) shares in the amount of EUR 105 thousand.
**  Includes financial financial income of  EUR 354 thousand in the first 9 months
of 2021 from the revaluation of TPD shares..

NORDIC FIBREBOARD LTD: Fibreboard production and sales

Fibreboard  sales in Q3  2022 were EUR 2.78 million  (Q3 2021: EUR 2.27 million). In
addition  to demand for construction materials remaining strong, the increase in
sales  revenue was also influenced by  the price increases implemented during Q2
2022. The price increase was inevitable, as there has been a continuous increase
in the price of raw materials and energy throughout 2022. Despite the decline in
Estonian  industrial  production  in  the  Q3  2022, the fibreboard order volume
remained  stable throughout the Q3 2022, which shows the strength of local north
European markets.

The  largest sales growth in Q3 2022, compared  to Q3 2021, was reflected in the
markets of Finland, Denmark and Latvia. Sales to Russia ended in May 2022 due to
the sanctions imposed as a result of Russia's war on Ukraine.

The operating profitability, ie EBITDA, of the fibreboard activities in Q3 2022
was  EUR 201 thousand, a  decrease of 42% compared  to the same  period last year.
This being caused by increased cost prices for woodchips, our main raw material,
as well as higher electricity prices during Q3 2022.

FIBREBOARD SALES BY GEOGRAPHICAL SEGMENTS

                      EUR thousand     |    EUR thousand
                 +---------+---------+---------+---------
                 | Q3 2022 | Q3 2021 | 9M 2022 | 9M 2021
-----------------+---------+---------+---------+---------
  European Union |   2,723 |   1,980 |   8,425 |   6,233
-----------------+---------+---------+---------+---------
  Middle East    |      47 |      13 |      73 |      13
-----------------+---------+---------+---------+---------
  Russia         |       0 |     269 |     427 |   1,083
-----------------+---------+---------+---------+---------
  Asia           |       0 |       0 |      69 |     124
-----------------+---------+---------+---------+---------
  Africa         |       0 |       0 |       0 |      46
-----------------+---------+---------+---------+---------
  Other          |      12 |       8 |      21 |      40
-----------------+---------+---------+---------+---------
  TOTAL          |   2,782 |   2,270 |   9,015 |   7,539

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 EUR 9 thousand in Q3 2022, (Q3 2021: EUR 65 thousand). The reason for
the  decrease in sales revenue  was caused by the  loss of the largest tenant at
the end of 2021.

The real estate management EBITDA for Q3 2022 were negative EUR 6 thousand and net
loss  EUR 6 thousand (Q3 2021: EBITDA positive EUR  11 thousand and net profit EUR 11
thousand).

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AND CASH FLOW STATEMENT

As  of 30.09.2022 the  total assets  of Nordic  Fibreboard AS were EUR 9.4 million
(30.09.2021:  EUR 8.3 million). The  liabilities of the  company as of 30.09.2022
were  EUR 4.7 million (30.09.2021: EUR 4.4 million), of which the Group has payables
of  EUR 1.0 million as at 30.09.2022 (30.09.2021: EUR 0.6 million) and borrowings of
EUR 3.1 million as at 30.09.2022 (30.09.2021: EUR 3.3 million).

Receivables  and  prepayments  amounted  to  EUR  1.3 million  as  at  30.09.2022
(30.09.2021:  EUR 1.1 million). Inventories  were EUR 0.9 million  as of 30.09.2022
(30.09.2021: EUR 0.4 million). Fixed assets were EUR 6.7 million as of 30.09.2022 (EUR
6.6 million as of 30.09.2021).

During  2022 9M, the Group's cash flows  from operating activities totalled cash
inflow  of EUR 617 thousand  (2021 9M: cash inflow  EUR 512 thousand). Cash outflows
due to investment activities was EUR 93 thousand during 9M 2022, mainly consisting
of  investments into production  assets of EUR  194 thousand and dividend received
from  TPD shares of EUR 105 thousand  (9M 2021: cash outflow EUR 243 thousand). Cash
outflows  due  to  financing  activities  was  EUR  111 thousand  during 9M 2022,
consisting  of loans repaid of EUR 76 thousand and finance lease payments of EUR 35
thousand  (9M 2022: cash outflow EUR 91 thousand). Net cash effect during 9M 2021
showed cash inflows of EUR 413 thousand, (2021 9M: cash inflows EUR 178 thousand).

OUTLOOK

NORDIC FIBREBOARD LTD

Demand   for  fibreboards  was  stabile  during  Q3  2022, however  we  are  now
experiencing  a decline in customer orders. As  a result of such drop in demand,
we intend to reduce our production capacity and lay off 8 production workers. It
has been an ongoing rise in the price of woodchips, our main input material, and
at  this stage the future outlook for woodchip prices remain unclear. Demand for
woodchips has risen as a result of power plants now using more biomass, and sale
of  wood pellets have also increased as a result of increased heating costs. The
uncertainty  this autumn of the direction of the electricity market forced us to
lock  in electricity prices for  period 1.1.2023 to 30.6.2024. We alleviated the
impact  of  higher  electricity  prices  in  2023, as  a result of the new fixed
electricity contract, by increasing our prices during Q4 2022.

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

 EUR thousand
                                  |          |                     |
 Income statement                 |   Q3 2022|   Q3 2021    9M 2022|   9M 2021
----------------------------------+----------+----------+----------+----------
 Revenue                          |     2,791|     2,334|     9,043|     7,757
----------------------------------+----------+----------+----------+----------
 EBITDA                           |       193|       356|     1,071|     1,341
----------------------------------+----------+----------+----------+----------
 EBITDA margin                    |        7%|       15%|       12%|       17%
----------------------------------+----------+----------+----------+----------
 Operating profit                 |        68|       232|       699|       962
----------------------------------+----------+----------+----------+----------
 Operating margin                 |        2%|       10%|        8%|       12%
----------------------------------+----------+----------+----------+----------
 Net profit                       |       117|        73|       848|     1,229
----------------------------------+----------+----------+----------+----------
 Net margin                       |        4%|        3%|        9%|       16%
                                  |          |          |          |

                                  |          |          |          |
 Statement of financial position  |30.09.2022|31.12.2021|30.09.2021|31.12.2020
----------------------------------+----------+----------+----------+----------
 Total assets                     |     9,389|     8,063|     8,301|     7,650
----------------------------------+----------+----------+----------+----------
 Return on assets                 |        9%|       15%|       15%|       14%
----------------------------------+----------+----------+----------+----------
 Equity                           |     4,698|     3,850|     3,878|     2,648
----------------------------------+----------+----------+----------+----------
 Return on equity                 |       18%|       31%|       32%|       41%
----------------------------------+----------+----------+----------+----------
 Debt-to-equity ratio             |       50%|       52%|       53%|       65%
                                  |          |          |          |

                                  |          |          |          |
 Share                            |30.09.2022|31.12.2021|30.09.2021|31.12.2020
----------------------------------+----------+----------+----------+----------
 Last Price*                      |      1.74|      1.95|      2.20|      0.45
----------------------------------+----------+----------+----------+----------
 Earnings per share               |      0.18|      0.27|      0.55|      0.24
----------------------------------+----------+----------+----------+----------
 Price-earnings ratio             |      9.54|      7.30|      4.02|      1.89
----------------------------------+----------+----------+----------+----------
 Book value of a share            |      1,04|      0.86|      0.86|      0.59
----------------------------------+----------+----------+----------+----------
 Market to book ratio             |      1.67|      2.28|      2.55|      0.76
----------------------------------+----------+----------+----------+----------
 Market capitalization, EUR thousand|     7,828|     8,773|     9,898|     2,025
----------------------------------+----------+----------+----------+----------
 Number of shares, piece          | 4,499,061| 4,499,061| 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-equity 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 shares
*http://www.nasdaqbaltic.com/

Consolidated statement of financial positions

 EUR thousand                                  |30.09.2022|31.12.2021|30.09.2021
---------------------------------------------+----------+----------+----------
 Cash and cash equivalents                   |       470|        57|       204
---------------------------------------------+----------+----------+----------
 Receivables and prepayments (Note 2)        |     1,345|       902|     1,118
---------------------------------------------+----------+----------+----------
 Inventories (Note 3)                        |       874|       390|       390
---------------------------------------------+----------+----------+----------
 Total current assets                        |     2,689|     1,349|     1,712
---------------------------------------------+----------+----------+----------
                                             |          |          |
---------------------------------------------+----------+----------+----------
 Investment property (Note 4)                |     1,156|     1,152|     1,139
---------------------------------------------+----------+----------+----------
 Available-for-sale financial assets (Note 7)|       787|       644|       805
---------------------------------------------+----------+----------+----------
 Property, plant and equipment (Note 5)      |     4,755|     4,915|     4,642
---------------------------------------------+----------+----------+----------
 Intangible assets (Note 6)                  |         2|         3|         3
---------------------------------------------+----------+----------+----------
 Total non-current assets                    |     6,700|     6,714|     6,589
---------------------------------------------+----------+----------+----------
                                             |          |          |
---------------------------------------------+----------+----------+----------
 TOTAL ASSETS                                |     9,389|     8,063|     8,301
---------------------------------------------+----------+----------+----------
                                             |          |          |
---------------------------------------------+----------+----------+----------
 Borrowings (Notes 8)                        |        38|       146|        36
---------------------------------------------+----------+----------+----------
 Payables and prepayments (Notes 9)          |     1,410|       829|     1,002
---------------------------------------------+----------+----------+----------
 Short-term provisions (Note 10)             |         4|        19|         4
---------------------------------------------+----------+----------+----------
 Total current liabilities                   |     1,452|       994|     1,042
---------------------------------------------+----------+----------+----------
                                             |          |          |
---------------------------------------------+----------+----------+----------
 Long-term borrowings (Notes 8)              |     3,094|     3,074|     3,220
---------------------------------------------+----------+----------+----------
 Long-term provisions (Note 10)              |       145|       145|       161
---------------------------------------------+----------+----------+----------
 Total non-current liabilities               |     3,239|     3,219|     3,381
---------------------------------------------+----------+----------+----------
 Total liabilities                           |     4,691|     4,213|     4,423
---------------------------------------------+----------+----------+----------
                                             |          |          |
---------------------------------------------+----------+----------+----------
 Share capital (at nominal value) (Note 11)  |       450|       450|       450
---------------------------------------------+----------+----------+----------
 Statutory reserve capital                   |        45|         0|         0
---------------------------------------------+----------+----------+----------
 Retained earnings (loss)                    |     4,203|     3,400|     3,428
---------------------------------------------+----------+----------+----------
 Total equity                                |     4,698|     3,850|     3,878
---------------------------------------------+----------+----------+----------
                                             |          |          |
---------------------------------------------+----------+----------+----------
 TOTAL LIABILITIES AND EQUITY                |     9,389|     8,063|     8,301

*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

  EUR thousand                           | Q3 2022 | Q3 2021 | 9M 2022 | 9M 2021
---------------------------------------+---------+---------+---------+---------
  Revenue (Note 13)                    |   2,791 |   2,334 |   9,043 |   7,757
---------------------------------------+---------+---------+---------+---------
  Cost of goods sold (Note 14)         |   2,387 |   1,721 |   7,134 |   5,451
---------------------------------------+---------+---------+---------+---------
  Gross profit                         |     404 |     613 |   1,909 |   2,306
---------------------------------------+---------+---------+---------+---------
                                       |         |         |         |
---------------------------------------+---------+---------+---------+---------
  Distribution costs (Note 15)         |     278 |     251 |     919 |     891
---------------------------------------+---------+---------+---------+---------
  Administrative expenses (Note 16)    |      90 |     131 |     315 |     445
---------------------------------------+---------+---------+---------+---------
  Other operating income (Note 18)     |      33 |       2 |      33 |       5
---------------------------------------+---------+---------+---------+---------
  Other operating expenses (Note 18)   |       1 |       1 |       9 |      13
---------------------------------------+---------+---------+---------+---------
  Operating profit                     |      68 |     232 |     699 |     962
---------------------------------------+---------+---------+---------+---------
                                       |         |         |         |
---------------------------------------+---------+---------+---------+---------
  Finance income (Note 19)             |      79 |       0 |     248 |     354
---------------------------------------+---------+---------+---------+---------
  Finance costs (Note 19)              |      30 |     159 |      99 |      87
---------------------------------------+---------+---------+---------+---------
  Profit before income tax             |     117 |      73 |     848 |   1,229
---------------------------------------+---------+---------+---------+---------
  Corporate income tax                 |       0 |       0 |       0 |       0
---------------------------------------+---------+---------+---------+---------
                                       |         |         |         |
---------------------------------------+---------+---------+---------+---------
  Net profit for the period            |     117 |      73 |     848 |   1,229
---------------------------------------+---------+---------+---------+---------
                                       |         |         |         |
---------------------------------------+---------+---------+---------+---------
  Basic earnings per share (Note 12)   |    0.03 |    0.02 |    0.19 |    0.27
---------------------------------------+---------+---------+---------+---------
  Diluted earnings per share (Note 12) |    0.03 |    0.02 |    0.19 |    0.27

*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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