Market announcement

Title

Unaudited financial results of Nordic Fibreboard AS for the second quarter and 6 months of 2022

Message

MANAGEMENT REPORT

Consolidated  net  sales  for  Q2  2022 were  EUR  3.65 million  (Q2 2021: EUR 2.58
million).  The main business area is the production and wholesale of fibreboard,
which  recorded sales in Q2 2022 of  EUR 3.64 million, an increase of 45% compared
to  Q2  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 Q2 2022 (Q2 2021: 64 thousand).

The  reason for  the increase  in sales  revenue in  Q2 2022 was  the continuing
strong  demand for  building materials  in the  construction sector and a higher
production  volume  compared  to  the  Q2  2021. Production  was running at full
capacity  and delivery times to our key customers was on average 3 months, which
has  been the  norm during  the last  2 years. Real  estate management  lost its
largest  tenant end of last year, which thus  resulted in less sales in Q2 2022
compared to Q2 2021.

The consolidated EBITDA of Nordic Fibreboard for Q2 2021 was EUR 624 thousand, the
EBITDA  margin was 17% (Q2 2021: EBITDA was EUR 502 thousand and the EBITDA margin
was  19%).  Compared to the Q2 2021 the Group`s gross margin decreased from 37%
to  30% in the Q2 2022. The  main reason for this  reduction in profitability is
due  to  the  sharp  increase  in  raw  material costs, ie woodchips and energy,
experienced during 2022.

In  the  Q2  2022, a  total  financial  income  of  EUR  82 thousand was recorded,
consisting  of financial income of EUR  105 thousand from dividend from the shares
of  Trigon  Property  Development  (TPD),  EUR  12 thousand  from profits from the
revaluation  of these shares,  and financial costs  of EUR 35 thousand.  In the Q2
2021, the  financial  income  of  EUR  227 thousand  consisted  of profit from the
revaluation  of  TPD  shares  of  EUR  257 thousand,  and financial costs of EUR 30
thousand.

Group`s  consolidated net profit for Q2 2022 was EUR 580 thousand (Q2 2021: profit
EUR 606 thousand).

DIVISIONAL REVIEW

Revenue by business segments

  EUR thousand                         Q2 2022 | Q2 2021 | 6M 2022 | 6M 2021
---------------------------------------------+---------+---------+---------
  Fibreboards production and sales     3,643 |   2,513 |   6,234 |   5,269
---------------------------------------------+---------+---------+---------
  Real Estate Management                   9 |      64 |      18 |     153
---------------------------------------------+---------+---------+---------
  TOTAL                                3,652 |   2,576 |   6,252 |   5,422

Profit by business segments

  EUR thousand                         Q2 2022 | Q2 2021   6M 2022 | 6M 2021
---------------------------------------------+-------------------+---------
  EBITDA by business units:                  |                   |
---------------------------------------------+-------------------+---------
  Fibreboards production and sales       635 |     497       914 |     993
---------------------------------------------+-------------------+---------
  Real Estate Management                 (3) |     (9)      (12) |     (1)
---------------------------------------------+-------------------+---------
  Group transactions                     (8) |      14      (23) |     (6)
---------------------------------------------+-------------------+---------
  TOTAL EBITDA                           624 |     502       879 |     986
---------------------------------------------+-------------------+---------
  Depreciation                         (126) |   (123)     (248) |   (256)
---------------------------------------------+-------------------+---------
  TOTAL OPERATING PROFIT/ LOSS           498 |     379       631 |     730
---------------------------------------------+-------------------+---------
  Net financial income                    82 |     227       100 |     427
---------------------------------------------+-------------------+---------
  NET PROFIT/ LOSS                       580 |     606       731 |   1,157

NORDIC FIBREBOARD LTD: FIBREBOARD PRODUCTION AND SALES

Fibreboard  sales in  Q2 2022 were  EUR 3.64 million  (2021: EUR  2.51 million). The
order  backlog remained  strong throughout  Q2 2022 reflecting  the strong local
markets,  however we are keeping  in close touch with  existing customers in far
away  markets, which resulted in  some sales to Asia  and Middle East. During Q2
2022, we  increased the prices of our products to compensate for the increase in
raw materials prices and energy costs.

The  biggest increase  in sales  growth in  Q2 2022 came  from strong  sales and
volume  growth in our  three largest markets,  these being Finland, Denmark, and
Estonia.  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 Q2 2022
was  EUR 635 thousand, an increase  of 22% compared to the  same period last year.
Fibreboard  division's net profit  for Q2 2022 was  EUR 592 thousand (Q2 2021: net
profit EUR 603 thousand).

FIBREBOARD SALES BY GEOGRAPHICAL SEGMENTS

                      EUR thousand     |    EUR thousand
                 ----------+---------+---------+---------
                   Q2 2022 | Q2 2021 | 6M 2022 | 6M 2021
---------------------------+---------+---------+---------
  European Union     3,444 |   2,094 |   5,702 |   4,253
---------------------------+---------+---------+---------
  Russia               158 |     381 |     427 |     814
---------------------------+---------+---------+---------
  Asia                  28 |      22 |      70 |     124
---------------------------+---------+---------+---------
  Middle East           13 |       0 |      26 |       0
---------------------------+---------+---------+---------
  Africa                 0 |       0 |       0 |      46
---------------------------+---------+---------+---------
  Other                  0 |      16 |       9 |      32
---------------------------+---------+---------+---------
  TOTAL              3,643 |   2,513 |   6,234 |   5,269

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 Q2 2022, (Q2 2021: EUR 64 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 Q2 2022 were negative EUR 3 thousand and net
loss  EUR 3 thousand  (Q2 2021: EBITDA  negative EUR  9 thousand and  net loss  EUR 9
thousand).

STATEMENT OF FINANCIAL POSITION AND CASH FLOW STATEMENT

As  of 30.06.2022 the  total assets  of Nordic  Fibreboard AS were EUR 9.1 million
(30.06.2021:   EUR 8.1 million). The liabilities of  the company as of 30.06.2022
were  EUR 4.5 million  (30.06.2021: EUR  4.3 million), of  which Group  has payables
amounting  to  EUR  0.8 million  as  at 30.06.2022 (30.06.2021: EUR 0.5 million) and
borrowings of EUR 3.2 million as at 30.06.2022 (30.06.2021: also EUR 3.2 million).

Receivables  and  prepayments  amounted  to  EUR  1.6 million  as  at  30.06.2022
(30.06.2021:  EUR 1.0 million). Inventories  were EUR 0.6 million  as of 30.06.2022
(30.06.2021: EUR 0.5 million). Fixed assets were EUR 6.7 million as of 30.06.2022 (EUR
6.6 million as of 30.06.2021).

During  6M 2022, the Group's cash flows  from operating activities totalled cash
inflow  of EUR 269 thousand  (6M 2021: cash inflow  EUR 110 thousand). Cash outflows
due  to investment activities  was  EUR 39 thousand  during 6M 2022, consisting of
investments  into production assets of EUR 144 thousand and dividend received from
TPD  shares  of  EUR  105 thousand  (6M  2021: cash  outflow  EUR 58 thousand). Cash
outflows  due  to  financing  activities  was  EUR  74 thousand  during  6M 2022,
consisting  of loans repaid of EUR 50 thousand and finance lease payments of EUR 24
(6M  2022: cash outflow  EUR 40 thousand).  Net cash  effect during 6M 2022 showed
cash inflows of EUR 156 thousand (6M 2021: cash inflows EUR 12 thousand).

OUTLOOK

NORDIC FIBREBOARD LTD

Demand  for  fibreboards  was  strong  during  Q2 2022 and the outlook near term
indicate that demand is still good despite the current market uncertainty driven
by  higher  energy  costs  and  an  increased  interest  rate  environment.  Our
relatively inexpensive fibreboards, with its green credentials, should provide a
somewhat  good  hedge  against  any  future  softening  of the building material
markets.  Nordic Fibreboard's extensive customer  reach on several continents is
also a comforting factor when looking ahead.

The management is in process of securing financing for a new biomass boiler, the
objective  being to  improve the boiler house`s  energy and resource use , which
would  improve the efficiency of  using wood fuel and  reduce air emissions. The
goal  of Nordic Fibreboard`s is  to improve the company`s  current energy use so
that it can operate more efficiently and environmentally friendly in the future.

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

 Income statement                 |   Q2 2022|   Q2 2021    6M 2022|   6M 2021
----------------------------------+----------+----------+----------+----------
 Revenue                          |     3,652|     2,576|     6,252|     5,422
----------------------------------+----------+----------+----------+----------
 EBITDA                           |       624|       502|       879|       986
----------------------------------+----------+----------+----------+----------
 EBITDA margin                    |       17%|       19%|       14%|       18%
----------------------------------+----------+----------+----------+----------
 Operating profit                 |       498|       379|       631|       730
----------------------------------+----------+----------+----------+----------
 Operating margin                 |       14%|       15%|       10%|       13%
----------------------------------+----------+----------+----------+----------
 Net profit                       |       580|       606|       731|     1 157
----------------------------------+----------+----------+----------+----------
 Net margin                       |       16%|       24%|       12%|       21%
                                  |          |          |          |

                                  |          |          |          |
 Statement of financial position  |30.06.2022|31.12.2021|30.06.2021|31.12.2020
----------------------------------+----------+----------+----------+----------
 Total assets                     |     9,100|     8,063|     8,140|     7,650
----------------------------------+----------+----------+----------+----------
 Return on assets                 |        8%|       15%|       14%|       14%
----------------------------------+----------+----------+----------+----------
 Equity                           |     4,582|     3,850|     3,805|     2,648
----------------------------------+----------+----------+----------+----------
 Return on equity                 |       16%|       31%|       30%|       41%
----------------------------------+----------+----------+----------+----------
 Debt-to-equity ratio             |       50%|       52%|       53%|       65%
                                  |          |          |          |

                                  |          |          |          |
 Share                            |30.06.2022|31.12.2021|30.06.2021|31.12.2020
----------------------------------+----------+----------+----------+----------
 Last Price*                      |      1.66|      1.95|      1.74|      0.45
----------------------------------+----------+----------+----------+----------
 Earnings per share               |      0.17|      0.27|      0.57|      0.24
----------------------------------+----------+----------+----------+----------
 Price-earnings ratio             |      9.61|      7.30|      3.05|      1.89
----------------------------------+----------+----------+----------+----------
 Book value of a share            |      1.02|      0.86|      0.85|      0.59
----------------------------------+----------+----------+----------+----------
 Market to book ratio             |      1.63|      2.28|      2.06|      0.76
----------------------------------+----------+----------+----------+----------
 Market capitalization, EUR thousand|     7,468|     8,773|     7,828|     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 number of shares
*http://www.nasdaqbaltic.com/

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 EUR thousand                        |30.06.2022|31.12.2021|30.06.2021|31.12.2020
-----------------------------------+----------+----------+----------+----------
 Cash and cash equivalents         |       213|        57|        38|        26
-----------------------------------+----------+----------+----------+----------
 Receivables and prepayments (Note |          |          |          |
 2)                                |     1,632|       902|       977|       794
-----------------------------------+----------+----------+----------+----------
 Inventories (Note 3)              |       587|       390|       526|       544
-----------------------------------+----------+----------+----------+----------
                                   |          |          |          |
-----------------------------------+----------+----------+----------+----------
 Total current assets              |     2,432|     1,349|     1,541|     1,364
-----------------------------------+----------+----------+----------+----------
                                   |          |          |          |
-----------------------------------+----------+----------+----------+----------
 Investment property (Note 4)      |     1,152|     1,152|     1,136|     1,134
-----------------------------------+----------+----------+----------+----------
 Financial assets at fair value    |          |          |          |
 through profit or loss (Note 7)   |       708|       644|       933|       451
-----------------------------------+----------+----------+----------+----------
 Property, plant and equipment     |          |          |          |
 (Note 5)                          |     4,805|     4,915|     4,527|     4,695
-----------------------------------+----------+----------+----------+----------
 Intangible assets (Note 6)        |         3|         3|         3|         6
-----------------------------------+----------+----------+----------+----------
 Total non-current assets          |     6,668|     6,714|     6,599|     6,286
-----------------------------------+----------+----------+----------+----------
                                   |          |          |          |
-----------------------------------+----------+----------+----------+----------
 TOTAL ASSETS                      |     9,100|     8,063|     8,140|     7,650
-----------------------------------+----------+----------+----------+----------
                                   |          |          |          |
-----------------------------------+----------+----------+----------+----------
 Borrowings (Notes 8)              |        75|       146|        70|       756
-----------------------------------+----------+----------+----------+----------
 Payables and prepayments (Notes 9)|     1,218|       829|       927|     1,574
-----------------------------------+----------+----------+----------+----------
 Short-term provisions (Note 10)   |         9|        19|         9|        18
-----------------------------------+----------+----------+----------+----------
 Total current liabilities         |     1,302|       994|     1,006|     2,348
-----------------------------------+----------+----------+----------+----------
                                   |          |          |          |
-----------------------------------+----------+----------+----------+----------
 Long-term borrowings (Notes 8)    |     3,071|     3,074|     3,168|     2,493
-----------------------------------+----------+----------+----------+----------
 Long-term provisions (Note 10)    |       145|       145|       161|       161
-----------------------------------+----------+----------+----------+----------
 Total non-current liabilities     |     3,216|     3,219|     3,329|     2,654
-----------------------------------+----------+----------+----------+----------
 Total liabilities                 |     4,518|     4,213|     4,335|     5,002
-----------------------------------+----------+----------+----------+----------
                                   |          |          |          |
-----------------------------------+----------+----------+----------+----------
 Share capital (at nominal value)  |          |          |          |
 (Note 11)                         |       450|       450|       450|       450
-----------------------------------+----------+----------+----------+----------
 Statutory reserve capital         |        45|         0|         0|         0
-----------------------------------+----------+----------+----------+----------
 Retained earnings (loss)          |     4,087|     3,400|     3,355|     2,198
-----------------------------------+----------+----------+----------+----------
 Total equity                      |     4,582|     3,850|     3,805|     2,648
-----------------------------------+----------+----------+----------+----------
                                   |          |          |          |
-----------------------------------+----------+----------+----------+----------
 TOTAL LIABILITIES AND EQUITY      |     9,100|     8,063|     8,140|     7,650

*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 COMREHENSIVE INCOME

  EUR thousand                           | Q2 2022 | Q2 2021 | 6M 2022 | 6M 2021
---------------------------------------+---------+---------+---------+---------
  Revenue (Note 13)                    |   3,652 |   2,576 |   6,252 |   5,422
---------------------------------------+---------+---------+---------+---------
  Cost of goods sold (Note 14)         |   2,687 |   1,750 |   4,746 |   3,729
---------------------------------------+---------+---------+---------+---------
  Gross profit                         |     965 |     826 |   1,506 |   1,693
---------------------------------------+---------+---------+---------+---------
                                       |         |         |         |
---------------------------------------+---------+---------+---------+---------
  Distribution costs (Note 15)         |     356 |     298 |     641 |     640
---------------------------------------+---------+---------+---------+---------
  Administrative expenses (Note 16)    |     104 |     142 |     226 |     314
---------------------------------------+---------+---------+---------+---------
  Other operating income (Note 18)     |       0 |       1 |       0 |       3
---------------------------------------+---------+---------+---------+---------
  Other operating expenses (Note 18)   |       7 |       8 |       8 |      12
---------------------------------------+---------+---------+---------+---------
  Operating profit (loss)              |     498 |     379 |     631 |     730
---------------------------------------+---------+---------+---------+---------
                                       |         |         |         |
---------------------------------------+---------+---------+---------+---------
  Finance income (Note 19)             |     117 |     257 |     169 |     483
---------------------------------------+---------+---------+---------+---------
  Finance costs (Note 19)              |      35 |      30 |      69 |      56
---------------------------------------+---------+---------+---------+---------
  PROFIT BEFORE INCOME TAX             |     580 |     606 |     731 |   1,157
---------------------------------------+---------+---------+---------+---------
                                       |         |         |         |
---------------------------------------+---------+---------+---------+---------
  NET PROFIT FOR THE PERIOD            |     580 |     606 |     731 |   1,157
---------------------------------------+---------+---------+---------+---------
                                       |         |         |         |
---------------------------------------+---------+---------+---------+---------
  Basic earnings per share (Note 12)   |    0.13 |    0.13 |    0.16 |    0.26
---------------------------------------+---------+---------+---------+---------
  Diluted earnings per share (Note 12) |    0.13 |    0.13 |    0.16 |    0.26

*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
[email protected]
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