Market announcement

Title

Unaudited financial report of Nordic Fibreboard AS for the fourth quarter and 12 months of 2022

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MANAGEMENT REPORT

Consolidated net sales for Q4 2022 were EUR 2.03 million (down from EUR 2.34 million
in Q4 2021). The main business area of production and wholesale of fibreboard
recorded sales in Q4 2022 of EUR 2.02 million, 12% down from sales in Q4 2021. The
remaining business area is real estate management of the property owned in Suur-
Jõe Street in Pärnu, who recorded sales of EUR 11 thousand in Q4 2022 (Q4
2021: 36 thousand).

Consolidated sales for the full year 2022 was EUR 11.07 million, which is an
increase of 10% compared to 2021 full year sales of EUR 10.10 million. The reason
for such sales increase is due to increased sales of fibreboards in our key
markets such as Finland, Denmark, Estonia and Latvia. However, the Group's gross
margin fell from 33% for full year 2021 to becoming 23% for full year 2022, the
main reasons being the increased prices of raw materials in the fibreboard
production, these being woodchips and energy.

The consolidated EBITDA of Nordic Fibreboard AS was EUR 661 thousand for Q4 2022
(Q4 2021: EBITDA EUR 215 thousand). The increase in EBITDA in Q4 2022 was due to
the revaluation of the fair value of the investment property in the real estate
management segment, adding EUR 697 thousand to EBITDA and thus increasing EBITDA
margin in Q4 2022 compared to Q4 2021 from 9% to 33%. The Fibreboard segment
reported negative EBITDA of EUR 23 thousand in Q4 2022 (Q4 2021: EUR 218 thousand)
due to higher woodchip prices and less output due to slowdown in demand at the
end of the year. The consolidated EBITDA for the full year 2022 was EUR 1.73
million, which is an increase of 11% compared to full year 2021.

Consolidated net profit for Q4 2022 was EUR 386 thousand, which includes dividend
income of EUR 24 thousand from the fibreboard division's 20% ownership stake in
Trigon Property Development AS (TPD). In Q4 2021, we recorded a loss EUR 27
thousand on the revaluation of this shareholding. Net profit for full year 2022
was EUR 1.23 million, which includes total year 2022 dividend income from TPD
shares of EUR 129 thousand (full year 2021: profit EUR 1.20 million).

DIVISIONAL REVIEW

Revenue by business segments

  EUR thousand                         Q4 2022 | Q4 2021 | 12M 2022 | 12M 2021
---------------------------------------------+---------+----------+----------
  Fibreboards production and sales     2,020 |   2,304 |   11,035 |    9,842
---------------------------------------------+---------+----------+----------
  Real Estate Management                  11 |      36 |       39 |      254
---------------------------------------------+---------+----------+----------
  TOTAL                                2,031 |   2,339 |   11,074 |   10,096

Profit by business segments

  EUR thousand                         Q4 2022 | Q4 2021 | 12M 2022 | 12M 2021
---------------------------------------------+---------+----------+----------
  EBITDA by business units:                  |         |          |
---------------------------------------------+---------+----------+----------
  Fibreboards production and sales      (23) |     218 |    1,092 |    1,555
---------------------------------------------+---------+----------+----------
  Real Estate Management                 690 |       5 |      672 |       15
---------------------------------------------+---------+----------+----------
  Group transactions                     (6) |     (8) |     (32) |     (13)
---------------------------------------------+---------+----------+----------
  TOTAL EBITDA                           661 |     215 |    1,732 |    1,557
---------------------------------------------+---------+----------+----------
  Depreciation                         (125) |   (118) |    (497) |    (498)
---------------------------------------------+---------+----------+----------
  TOTAL OPERATING PROFIT/ LOSS           536 |      97 |    1,235 |    1,059
---------------------------------------------+---------+----------+----------
  Net financial costs                  (150) |   (124) |      (1) |      143
---------------------------------------------+---------+----------+----------
  NET PROFIT/ LOSS                       386 |    (27)      1,234 |    1,202




NORDIC FIBREBOARD LTD: Fibreboard production and sales

Fibreboard sales in Q4 2022 were EUR 2.02 million (Q4 2021: EUR 2.30 million). The
decrease in sales in Q4 2022 was due to a substantial reduction in demand in our
main local markets, such drop being a reflection of the uncertainty created by
the war in Ukraine, increased interest rates, and higher energy prices.

The operating profitability, ie EBITDA, of the Nordic Fibreboard Ltd activities
in Q4 2022 was negative EUR 23 thousand (Q4 2021: positive EUR 218 thousand). This
being caused by increased cost prices for woodchips, company´s main raw
material, as well as higher electricity prices in the second half of 2022.

The EBITDA of fibreboard for the full year in 2021 was EUR 1.09 million (full year
in 2021: EUR 1.55 million).

FIBREBOARD SALES BY GEOGRAPHICAL SEGMENTS

                      EUR thousand     |     EUR thousand
                 ----------+---------+----------+----------
                   Q4 2022 | Q4 2021 | 12M 2022 | 12M 2021
---------------------------+---------+----------+----------
  European Union     1,871 |   1,992 |   10,297 |    8,225
---------------------------+---------+----------+----------
  Middle East           82 |       0 |      154 |       13
---------------------------+---------+----------+----------
  Russia                 0 |     273 |      427 |    1,356
---------------------------+---------+----------+----------
  Asia                   0 |      23 |       69 |      147
---------------------------+---------+----------+----------
  Africa                 0 |       0 |        0 |       46
---------------------------+---------+----------+----------
  Other                 67 |      16 |       88 |       55
---------------------------+---------+----------+----------
  TOTAL              2,020 |   2,304 |   11,035 |    9,842

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 11 thousand in Q4 2022, (Q4 2021: EUR 36 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 Q4 2022 were EUR 690 thousand (Q4 2021: EUR 5
thousand). The reason for such a large change in EBITDA is the income received
from the fair value revaluation of the real estate investment object located at
Suur-Jõe Street 48 in Pärnu in the amount of EUR 697 thousand at the end of 20222

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AND CASH FLOW STATEMENT

As of 31.12.2022 the total assets of Nordic Fibreboard AS were EUR 9.4 million
(31.12.2021: 8.1 million). The liabilities of the company as of 31.12.2022 were
EUR 4.3 million (31.12.2021: EUR 4.2 million), of which the Group has payables of EUR
0.5 million as at 31.012.2022 (31.12.2021: EUR 0.4 million) and borrowings of EUR
3.2 million as at 31.12.2022 (31.12.2021: also EUR 3.2 million).

Receivables and prepayments amounted to EUR 0.6 million as at 31.12.2022
(31.12.2021: EUR 0.9 million). Inventories were EUR 1.7 million as of 31.12.2022
(31.12.2021: EUR 0.4 million). Fixed assets were EUR 7.2 million as of 31.12.2022 (EUR
6.7 million as of 31.12.2021).

During 2022 twelve months, the Group's cash flows from operating activities
totalled EUR 152 thousand (2021 twelve months: EUR 730 thousand). Cash outflows due
to investment activities was EUR 129 thousand during 2022, mainly consisting of
investments into production assets of EUR 254 thousand and dividend received from
TPD shares of EUR 129 thousand (2021: cash outflow EUR 587 thousand).  Financing
activities also resulted in cash outflows of EUR 78 thousand during 2022 (2021:
cash outflow EUR 112 thousand). Net cash effect during 2022 twelve months cash
outflow of EUR 55 thousand, (2021: cash inflow EUR 31 thousand).

OUTLOOK

NORDIC FIBREBOARD LTD

As a result of the declining demand during Q4 2022, company decided to undertake
major maintenance work of the factory at the start of 2023, thus delaying
reopening of the production line until 20 February 2023. This also gave the
opportunity to sell off excessive inventory. During the last few weeks, before
the release of the report, we have observed an increase in demand, which we
attribute to more market macro certainties, such as less unpredictable energy
prices and a downturn in inflation. The pricing of the company´s main raw
material, woodchips, seem to be easing somewhat from end of last year while
pricing of second largest input cost, electricity, is fixed at a high price. The
company´s previous electricity contract ended 31.12.2022, and a new contract was
concluded for period 1.1.2023 to 30.6.2024, at a higher price than the old
contract (see further notes in Financial Risks section below).

The company had a longer maintenance period at start of year 2023, from mid-
December 2022 to 19(th) February 2023. Production was restarted only on 20(th)
February. With no output during this period, while having to carry the normal
costing during the maintenance period, the company expect 2023 Q1 financial
results to be poor. That being said, the building materials market tend to be
more active during the Spring months (ie Q2) and at this stage it does look like
this will be case also this year.

PÄRNU RIVERSIDE DEVELOPMENT

The company will continue to manage and develop the property on Suur-Jõe Street
48, Pärnu. A detail plan for the property is ongoing (expected to be approved
this Spring), with the intention of converting the property into a private
residential property.



FINANCIAL HIGHLIGHTS

  EUR thousand
                         |         |         |          |
  Income statement       | Q4 2022 | Q4 2021 | 12M 2022 | 12M 2021
-------------------------+---------+---------+----------+----------
  Revenue                |   2,031 |   2,339 |   11,074 |   10,096
-------------------------+---------+---------+----------+----------
  EBITDA                 |     661 |     215 |    1,732 |    1,557
-------------------------+---------+---------+----------+----------
  EBITDA margin          |     33% |      9% |      16% |      15%
-------------------------+---------+---------+----------+----------
  Operating profit/-loss |     536 |      97 |    1,235 |    1,059
-------------------------+---------+---------+----------+----------
  Operating margin       |     26% |      4% |      11% |      10%
-------------------------+---------+---------+----------+----------
  Net profit/-loss       |     386 |    (27) |    1,234 |    1,202
-------------------------+---------+---------+----------+----------
  Net margin             |     19% |    (1%) |      11% |      12%


  Statement of financial position   | 31.12.2022 | 31.12.2021
------------------------------------+------------+------------
  Total assets                      |      9,408 |      8,063
------------------------------------+------------+------------
  Return on assets                  |        13% |        15%
------------------------------------+------------+------------
  Equity                            |      5,084 |      3,850
------------------------------------+------------+------------
  Return on equity                  |        24% |        31%
------------------------------------+------------+------------
  Debt-to-equity ratio              |        46% |        52%
                                    |            |

                                    |            |
  Share                             | 31.12.2022 | 31.12.2021
------------------------------------+------------+------------
  Last Price*                       |       1.60 |       1.95
------------------------------------+------------+------------
  Earnings per share                |       0.27 |       0.27
------------------------------------+------------+------------
  Price-earnings ratio              |       5.83 |       7.30
------------------------------------+------------+------------
  Book value of a share             |       1.13 |       0.86
------------------------------------+------------+------------
  Market to book ratio              |       1.42 |       2.28
------------------------------------+------------+------------
  Market capitalization, EUR thousand |      7,198 |      8,773
------------------------------------+------------+------------
  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-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                                   |31.12.2022|31.12.2021|31.12.2020
----------------------------------------------+----------+----------+----------
 Cash and cash equivalents                    |         2|        57|        26
----------------------------------------------+----------+----------+----------
 Receivables and prepayments (Note 2)         |       559|       902|       794
----------------------------------------------+----------+----------+----------
 Inventories (Note 3)                         |     1,672|       390|       544
----------------------------------------------+----------+----------+----------
 Total current assets                         |     2,233|     1,349|     1,364
----------------------------------------------+----------+----------+----------
                                              |          |          |
----------------------------------------------+----------+----------+----------
 Investment property (Note 4)                 |     1,859|     1,152|     1,134
----------------------------------------------+----------+----------+----------
 Financial assets at fair value through profit|          |          |
 or loss (Note 7)                             |       644|       644|       451
----------------------------------------------+----------+----------+----------
 Property, plant, equipment and right-of-use  |          |          |
 assets (Note 5)                              |     4,670|     4,915|     4,695
----------------------------------------------+----------+----------+----------
 Intangible assets (Note 6)                   |         2|         3|         6
----------------------------------------------+----------+----------+----------
 Total non-current assets                     |     7,175|     6,714|     6,286
----------------------------------------------+----------+----------+----------
                                              |          |          |
----------------------------------------------+----------+----------+----------
 TOTAL ASSETS                                 |     9,408|     8,063|     7,650
----------------------------------------------+----------+----------+----------
                                              |          |          |
----------------------------------------------+----------+----------+----------
 Borrowings (Notes 8)                         |       290|       146|       756
----------------------------------------------+----------+----------+----------
 Payables and prepayments (Notes 9)           |     1,014|       829|     1,574
----------------------------------------------+----------+----------+----------
 Short-term provisions (Note 10)              |        18|        19|        18
----------------------------------------------+----------+----------+----------
 Total current liabilities                    |     1,322|       994|     2,348
----------------------------------------------+----------+----------+----------
                                              |          |          |
----------------------------------------------+----------+----------+----------
 Long-term borrowings (Notes 8)               |     2,875|     3,074|     2,493
----------------------------------------------+----------+----------+----------
 Long-term provisions (Note 10)               |       127|       145|       161
----------------------------------------------+----------+----------+----------
 Total non-current liabilities                |     3,002|     3,219|     2,654
----------------------------------------------+----------+----------+----------
 Total liabilities                            |     4,324|     4,213|     5,002
----------------------------------------------+----------+----------+----------
                                              |          |          |
----------------------------------------------+----------+----------+----------
 Share capital (at nominal value) (Note 11)   |       450|       450|       450
----------------------------------------------+----------+----------+----------
 Statutory reserve capital                    |        45|         0|         0
----------------------------------------------+----------+----------+----------
 Retained earnings (loss)                     |     4,589|     3,400|     2,198
----------------------------------------------+----------+----------+----------
 Total equity                                 |     5,084|     3,850|     2,648
----------------------------------------------+----------+----------+----------
                                              |          |          |
----------------------------------------------+----------+----------+----------
 TOTAL LIABILITIES AND EQUITY                 |     9,408|     8,063|     7,650

*The notes to the financial statements presented on pages 14 to 25 are an
integral part of these consolidated financial statements.



Consolidated statement of profit or loss and other comprehensive income

 EUR thousand                          |Q4 2022|Q4 2021|12M 2022|12M 2021
-------------------------------------+-------+-------+--------+--------
 Revenue (Note 13)                   |  2,031|  2,339|  11,074|  10,096
-------------------------------------+-------+-------+--------+--------
 Cost of goods sold (Note 14)        |  1,890|  1,843|   9,024|   7,294
-------------------------------------+-------+-------+--------+--------
 Gross profit                        |    141|    496|   2,050|   2,802
-------------------------------------+-------+-------+--------+--------
                                     |       |       |        |
-------------------------------------+-------+-------+--------+--------
 Distribution costs (Note 15)        |    193|    277|   1,112|   1,168
-------------------------------------+-------+-------+--------+--------
 Administrative expenses (Note 16)   |    109|    120|     424|     565
-------------------------------------+-------+-------+--------+--------
 Other operating income (Note 18)    |    697|      0|     730|       5
-------------------------------------+-------+-------+--------+--------
 Other operating expenses (Note 18)  |      0|      2|       9|      15
-------------------------------------+-------+-------+--------+--------
 Operating profit (loss)             |    536|     97|   1,235|   1,059
-------------------------------------+-------+-------+--------+--------
                                     |       |       |        |
-------------------------------------+-------+-------+--------+--------
 Finance income (Note 19)            |     24|      0|     129|     265
-------------------------------------+-------+-------+--------+--------
 Finance costs (Note 19)             |    174|    124|     130|     122
-------------------------------------+-------+-------+--------+--------
 PROFIT (LOSS) BEFORE INCOME TAX     |    386|   (27)|   1,234|   1,202
-------------------------------------+-------+-------+--------+--------
                                     |       |       |        |
-------------------------------------+-------+-------+--------+--------
 NET PROFIT (LOSS) FOR THE PERIOD    |    386|   (27)|   1,234|   1,202
-------------------------------------+-------+-------+--------+--------
                                     |       |       |        |
-------------------------------------+-------+-------+--------+--------
 Basic earnings per share (Note 12)  |   0.09| (0.01)|    0.27|    0.27
-------------------------------------+-------+-------+--------+--------
 Diluted earnings per share (Note 12)|   0.09| (0.01)|    0.27|    0.27

*The notes to the financial statements presented on pages 14 to 25 are an
integral part of these consolidated financial statements.

TORFINN LOSVIK
Chairman of the board
Phone: +372 56 99 0988
[email protected]
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