MANAGEMENT REPORT
NORDIC FIBREBOARD AS UNAUDITED RESULTS FOR FOURTH QUARTER AND 12 MONTHS OF2021
Consolidated net sales for Q4 2023 were € 2.34 million, which was 13% higher than in the same period of previous year (Q4 2020: € 2.07 million), of which the sales revenue of fibreboard was € 2.30 million and the sales revenue of real estate management was € 0.04 million.
Consolidated sales for the full year 2023 was € 10.10 million, a slight decline from 2020 full year sales of € 10.27 million. Main reason for such decline was due to the closure of the second fibreboard factory in March 2020 triggered by the COVID-19 pandemic, which led to a decline of fibreboard sales in year 2023 from year 2020 of € 0.16 million.
Fibreboard sales in Q4 2023 of € 2.31 million was ahead of Q4 2020 sales with € 0.29 million, which was due to fewer production maintenance days during Q4 2023 compared to Q4 2020. In the real estate management subsidiary Pärnu Riverside Development, sales in Q4 2023 of € 0.04 million was a decrease of € 0.03 million from Q4 2020, this being caused by the loss of the largest rental tenant in Q4 2023.
The consolidated EBITDA of Nordic Fibreboard AS was € 215 thousand for Q4 2023 (Q4 2020: EBITDA was € 137 thousand). The improvement in EBITDA was due to slightly improved gross margin as well as less overhead costs in the fibreboard division during Q4 2023 compared to Q4 2020. Overhead costs were lower due to the one-off expense incurred in Q4 2020 for the removal of the old unused office building located at the fibreboard site in Pärnu.
Consolidated net loss for Q4 2023 was € 27 thousand (Q4 2020: net profit € 1,231 thousand). The main reasons for the change in net profit is the refinancing of loans and overdrafts at the end of 2020, which generated a one-off financial income of € 1,237 thousand in Q4 2020. In addition, the net loss for the Q4 2023 includes the loss from the revaluation of the Group’s shareholding in the Nasdaq listed real estate company Trigon Property Development AS (“TPD”) in the amount of € 89 thousand (TPD shareholding showed a profit of € 32 thousand during Q4 2020).
Net profit for full year 2023 was € 1.20 million (full year 2020: € 1.07 million, after adjusting for the one-off financial income of € 1.24 million from the refinancing at the end of year 2020).
DIVISIONAL REVIEW
Revenue by business segments
| € thousand | Q4 2023 | Q4 2020 | 12M 2023 | 12M 2020 |
| Fibreboards production and sales | 2,304 | 2,007 | 9,842 | 10,001 |
| Real Estate Management | 36 | 64 | 254 | 212 |
| Furniture retail | 0 | 1 | 0 | 56 |
| Group transactions | (0) | 0 | (0) | (0) |
| TOTAL | 2,339 | 2,072 | 10,096 | 10,269 |
Profit by business segments
| € thousand | Q4 2023 | Q4 2020 | 12M 2023 | 12M 2020 |
| EBITDA by business units: | ||||
| Fibreboards production and sales | 218 | 139 | 1,555 | 597 |
| Real Estate Management | 5 | 3 | 15 | 0 |
| Furniture retail | 0 | (1) | 474 | (40) |
| Group transactions | (8) | (4) | (487) | (18) |
| TOTAL EBITDA | 215 | 137 | 1,557 | 540 |
| Depreciation | (118) | (136) | (498) | (558) |
| TOTAL OPERATING PROFIT/ LOSS | 97 | 0 | 1,059 | (19) |
| Net financial costs | (124) | 1,231* | 143 | 1,092* |
| NET PROFIT/ LOSS | (27) | 1,231 | 1,202 | 1,074 |
* Net financial costs in Q4 2020 (also 12M 2020) include extraordinary income € 1,237 thousand from loan refinancing.
NORDIC FIBREBOARD LTD: FIBREBOARD
Fibreboard sales in Q4 2023 was € 2.30 million reflects full capacity utilisation of our Pärnu factory. Apart from having usual monthly one-day maintenance periods, we also had the usual year-end longer maintenance period of 14 days, allowing us to make more extensive production machinery maintenance and updates. Demand remained strong during Q4 2023 period, and main priority was given to our usual key customers in the local markets of Finland, Denmark, Estonia, Russia, Sweden, and Latvia. Customers in these key markets accounted for about 90% of our total sales in Q4 2023.
The EBITDA of the fibreboard division in Q4 2023 was € 218 thousand (Q4 2020: € 139 thousand), the EBITDA of fibreboard for the full year in 2023 was € 1,555 thousand (full year in 2020: € 597 thousand). The main reasons for such annual EBITDA improvement were due to an increase in gross margin and lower overhead costs. Gross margin improvement was due to higher capacity utilisation caused by focusing on fewer product thicknesses, which allowed for longer production runs for each produced thickness, which let to improved production profitability. Overhead costs was reduced in 2023 compared to 2020 mainly due to the March 2020 closure of the loss-making Püssi factory, as well as the one-off expense incurred when demolishing the old unused office building located on the Pärnu fibreboard site.
FIBREBOARD SALES BY GEOGRAPHICAL SEGMENTS
| € thousand | € thousand | |||
| Q4 2023 | Q4 2020 | 12M 2023 | 12M 2020 | |
| European Union | 1,992 | 1,633 | 8,225 | 8,327 |
| Russia | 273 | 307 | 1,356 | 1,240 |
| Asia | 23 | 49 | 147 | 189 |
| Africa | 0 | 0 | 46 | 95 |
| Middle East | 0 | 10 | 13 | 65 |
| Other | 16 | 9 | 55 | 85 |
| TOTAL | 2,304 | 2,007 | 9,842 | 10,001 |
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, including the resale of utilities. Sales in Q4 2023 was € 36 thousand (2020 Q4: € 64 thousand). The reason for the decrease in sales revenue was caused by the loss of the largest tenant.
The real estate management EBITDA for Q4 2023 were positive € 5 thousand (Q4 2020: positive € 3 thousand). The real estate management net profit for Q4 2023 was € 5 thousand (Q4 2020: net profit € 3 thousand).
SKANO FURNITURE: RETAIL SALES
Skano Furniture finished its activities on 31.01.2020, when it closed the last two furniture showrooms, thus the retail sale of furniture did not have any sales revenue in Q4 2023 (Q4 2020, the revenue was € 1 thousand). We are in the process of liquidating Skano Furniture OÜ.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AND CASH-FLOW
As of 31.12.2023 the total assets of Nordic Fibreboard AS were € 8.1 million (31.12.2020: € 7.7 million). The liabilities of the company as of 31.12.2023 were € 4.2 million (31.12.2020: € 5.0 million), of which the Group has payables of € 0.4 million as at 31.012.2023 (31.12.2020: € 1.1 million) and borrowings of € 3.2 million as at 31.12.2023 (31.12.2020: also € 3.2 million).
Receivables and prepayments amounted to € 0.9 million as at 31.12.2023 (31.12.2020: € 0.8 million). Inventories were € 0.4 million as of 31.12.2023 (31.12.2020: € 0.5 million). Fixed assets were € 6.7 million as of 31.12.2023 (€ 6.3 million as of 31.12.2020).
During 2023 twelve months, the Group’s cash flows from operating activities totalled € 730 thousand (2020 twelve months: € 150 thousand). Investment activities resulted in cash outflows in amount of € 587 thousand during 2023 twelve months, which was mainly due to improvements in production machinery (2020 twelve months: outflow € 56 thousand). Financing activities also resulted in cash outflows of € 112 thousand during twelve months 2023 (2020 twelve months: cash outflow € 75 thousand). Net cash effect during 2023 twelve months cash inflow of € 31 thousand, which compares to 2020 twelve months cash inflows of € 19 thousand.
OUTLOOK
NORDIC FIBREBOARD LTD
Demand for fibreboards continue to be strong, reflecting the growth in the building material market, as well as the growing awareness of the green credentials of soft density fibreboards, as produced by Nordic Fibreboard Ltd.
Management is working on preparing the Pärnu based factory’s boiler house to meet the new emission requirements coming into force in 01.01.2025.
Preparations is also being undertaken in upgrading the company’s second factory, located in Püssi, so that the factory’s technical capabilities is adequate for possible restarting of the factory. The factory’s main energy source is gas, and the current high gas prices is therefore making it untenable to consider restarting this factory in the near future.
REAL ESTATE MANAGEMENT
We will continue to manage and develop the property on Suur-Jõe Street 48, Pärnu.
PEOPLE
On the 31st of December 2023, the Group employed 91 people (compared to 97 people as of 31.12.2020). The average number of personnel in Q4 2023 was 96 (Q4 2020: 96).
For twelve months of 2023, wages and salaries with taxes amounted to € 2.0 million (twelve months 2019: also € 2.0 million). Payments made to management board members of all group companies including all subsidiaries with relevant taxes were € 245 thousand in twelve months 2023 and € 217 thousand in twelve months 2020.
FINANCIAL HIGHLIGHTS
| € thousand | ||||
| Income statement | Q4 2023 | Q4 2020 | 12M 2023 | 12M 2020 |
| Revenue | 2,339 | 2,072 | 10,096 | 10,269 |
| EBITDA | 215 | 137 | 1,557 | 540 |
| EBITDA margin | 9% | 7% | 15% | 5% |
| Operating profit | 97 | 0 | 1,059 | (19) |
| Operating margin | 4% | 0% | 10% | (0%) |
| Net profit | (27) | 1,231 | 1,202 | 1,074 |
| Net margin | (1%) | 59% | 12% | 10% |
| Statement of financial position | 31.12.2021 | 31.12.2020 |
| Total assets | 8,063 | 7,650 |
| Return on assets | 15% | 14% |
| Equity | 3,850 | 2,648 |
| Return on equity | 31% | 41% |
| Debt-to-equity ratio | 52% | 65% |
| Share | 31.12.2021 | 31.12.2020 |
| Last Price* | 1.95 | 0.45 |
| Earnings per share | 0.27 | 0.24 |
| Price-earnings ratio | 7.30 | 1.89 |
| Book value of a share | 0.86 | 0.59 |
| Market to book ratio | 2.28 | 0.76 |
| Market capitalization, € thousand | 8,773 | 2,025 |
| 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 POSITION
| € thousand | 31.12.2021 | 31.12.2020 | 31.12.2019 |
| Cash and cash equivalents | 57 | 26 | 7 |
| Receivables and prepayments (Note 2) | 902 | 794 | 1,394 |
| Inventories (Note 3) | 390 | 544 | 894 |
| Total current assets | 1,349 | 1,364 | 2,296 |
| Investment property (Note 4) | 1,152 | 1,134 | 1,121 |
| Financial assets at fair value through profit or loss (Note 7) | 644 | 451 | 397 |
| Property, plant, equipment and right-of-use assets (Note 5) | 4,915 | 4,695 | 5,212 |
| Intangible assets (Note 6) | 3 | 6 | 19 |
| Total non-current assets | 6,714 | 6,286 | 6,749 |
| TOTAL ASSETS | 8,063 | 7,650 | 9,045 |
| Borrowings (Notes 8) | 146 | 756 | 4,547 |
| Payables and prepayments (Notes 9) | 829 | 1,574 | 2,665 |
| Short-term provisions (Note 10) | 19 | 18 | 20 |
| Total current liabilities | 994 | 2,348 | 7,232 |
| Long-term borrowings (Notes 8) | 3,074 | 2,493 | 92 |
| Long-term provisions (Note 10) | 145 | 161 | 179 |
| Total non-current liabilities | 3,219 | 2,654 | 271 |
| Total liabilities | 4,213 | 5,002 | 7,503 |
| Share capital (at nominal value) (Note 11) | 450 | 450 | 2,699 |
| Share premium | 0 | 0 | 364 |
| Statutory reserve capital | 0 | 0 | 288 |
| Other reserves | 0 | 0 | 84 |
| Retained earnings (loss) | 3,400 | 2,198 | (1,894) |
| Total equity | 3,850 | 2,648 | 1,542 |
| TOTAL LIABILITIES AND EQUITY | 8,063 | 7,650 | 9,045 |
*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
| € thousand | Q4 2023 | Q4 2020 | 12M 2023 | 12M 2020 |
| Revenue (Note 13) | 2,339 | 2,072 | 10,096 | 10,269 |
| Cost of goods sold (Note 14) | 1,843 | 1,591 | 7,294 | 8,099 |
| Gross profit | 496 | 481 | 2,802 | 2,170 |
| Distribution costs (Note 15) | 277 | 268 | 1,168 | 1,283 |
| Administrative expenses (Note 16) | 120 | 176 | 565 | 605 |
| Other operating income (Note 18) | 0 | 18 | 5 | 42 |
| Other operating expenses (Note 18) | 2 | 55 | 15 | 342 |
| Operating profit (loss) | 97 | 0 | 1,059 | (19) |
| Finance income (Note 19) | 0 | 1,269 | 265 | 1,291 |
| Finance costs (Note 19) | 124 | 38 | 122 | 199 |
| Profit (Loss) before income tax | (27) | 1,231 | 1,202 | 1,074 |
| NET PROFIT (LOSS) FOR THE PERIOD | (27) | 1,231 | 1,202 | 1,074 |
| Basic earnings per share (Note 12) | (0.01) | 0.27 | 0.27 | 0.24 |
| Diluted earnings per share (Note 12) | (0.01) | 0.27 | 0.27 | 0.24 |
*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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