Unaudited financial results of Nordic Fibreboard AS for the first quarter of 2021
MANAGEMENT REPORT
NORDIC FIBREBOARD AS UNAUDITED RESULTS FOR FIRST QUARTER OF 2021
Consolidated net sales for Q1 2021 were € 2.85 million, being an 11% decrease compared to Q1 2020. The main reason for the decrease in sales revenue was the loss of customers in the display board segment as a result of COVID-19 pandemic, due to which the Püssi factory was closed in March 2020. Fibreboard sales for Q1 2021 were 2.76 € million, which is an 11% decrease compared to the same period of the previous year (2020 Q1: 3.09 € million). The sales revenue of real estate management in the Q1 2021 were € 89 thousand, which is a 31% increase compared to the same period of the previous year (2020 Q1: € 68 thousand). There was no sales from furniture retail in the Q1 2021, as Skano Furniture terminated its active operations at the beginning of 2020, when the last sales of the discount campaign took place, which generated sales revenue of € 47 thousand in the Q1 2020.
Nordic Fibreboard AS consolidated EBITDA were positive € 484 thousand for Q1 2021 (vs negative € 310 thousand Q1 2020). Fibreboard EBITDA for the Q1 2021 were positive € 496 thousand (2020 Q1: negative € 255 thousand), EBITDA for real estate management positive € 8 thousand (2020 Q1: negative € 2 thousand), and EBITDA for furniture retail negative € 12 thousand (2020 Q1: negative € 47 thousand). The main reason for such large change in EBITDA are the improved efficiency of fibreboard. The closure of the Püssi fibreboard factory enabled us to switch the Püssi factory construction sector orders to our Pärnu factory, and we started a 4th shift in Pärnu in April 2020 as a result thereof. The Pärnu factory is now running continuously, except for a one-shift maintenance stop every month. EBITDA for the last rolling 12 months, ie from 1.4.2020 to 31.3.2021, were € 1 335 thousand.
Group`s consolidated net profit for Q1 2021 was € 550 thousand (Q1 2020: loss € 534 thousand). Net profit for the last rolling 12 months were € 2 158 thousand.
DIVISIONAL REWIEW
REVENUE BY BUSINESS SEGMENTS
| € thousand | Q1 2021 | Q1 2020 |
| Fibreboards production and sales | 2,757 | 3,091 |
| Real Estate Management | 89 | 68 |
| Furniture retail | 0 | 47 |
| TOTAL | 2,846 | 3,206 |
PROFIT BY BUSINESS SEGMENTS
| € thousand | Q1 2021 | Q1 2020 |
| EBITDA by business units: | ||
| Fibreboards production and sales | 496 | (255)* |
| Real Estate Management | 8 | (2) |
| Furniture retail | (12) | (47) |
| Group transactions | (8) | (6) |
| TOTAL EBITDA | 484 | (310) |
| Depreciation | (133) | (151) |
| TOTAL OPERATING PROFIT/ LOSS | 351 | (462) |
| Net financial costs | 199** | (72) |
| NET PROFIT/ LOSS | 550 | (534) |
* Includes extraordinary expense of Püssi factory closure of 187 thousand euros, shown in the income statement under other operating expenses.
** Includes € 225 thousand upward value adjustment from Fibreboard’s shareholding in real estate development company Trigon Property Development AS due to its strong share price appreciation during Q1 2021. The company owns a business park development area in Pärnu.
NORDIC FIBREBOARD LTD: FIBREBOARD PRODUCTIONS AND SALES
Fibreboard sales for Q1 2021 were 2.76 € million, which is an 11% decrease compared to the same period of the previous year (2020 Q1: 3.09 € million). We sold our products to customers in 18 countries during Q1 2021. The main reason for the drop in sales was the loss of many display board customers as a result of the COVID-19 pandemic. Most products sold to display board customers were produced in our Püssi factory, which was closed in March 2020. The strong demand experienced in Q1 2021 has resulted in the Pärnu factory running at full capacity, and us prioritising the orders from our key customers in the Nordic, Baltic, and Russia.
Fibreboard EBITDA for the Q1 2021 were positive € 496 thousand, which is a substantial improvement compared to the same period of the previous year (2020 Q1: negative € 255 thousand). The improvement has been achieved due to increased efficiency by achieving full machine utilisation in the Pärnu factory.
Fibreboard net profit for Q1 2021 was € 563 thousand (Q1 2020: net loss € 476 thousand). The result includes the € 225 thousand upward value adjustment to Fibreboard’s shareholding in Trigon Property Development.
FIBREBOARD SALES BY GEOGRAPHICAL SEGMENTS
| € thousand | Q1 2021 | Q1 2020 |
| European Union | 2,159 | 2,741 |
| Russia | 433 | 211 |
| Asia | 102 | 38 |
| Africa | 47 | 35 |
| Middle East | 0 | 38 |
| Other | 16 | 29 |
| TOTAL | 2,757 | 3,091 |
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, was € 89 thousand in Q1 2021, (Q1 2020: € 68 thousand).
The real estate management EBITDA for Q1 2021 were positive € 8 thousand (Q1 2020: negative € 2 thousand). The real estate management net profit for Q1 2021 was € 7 thousand, which has improved compared to the same period last year due to the addition of some tenants, (Q1 2020: net loss € 2 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 the Q1 2021 (Q1 2020 sales revenue was € 47 thousand). EBITDA for furniture retail for Q1 2021 were negative € 12 thousand (Q1 2020 EBITDA was negative € 47 thousand), we have rental obligations for one of the closed showrooms until 30.04.2021. The furniture retail net loss for Q1 2021 was € 12 thousand (Q1 2020 net loss was € 47 thousand).
STATEMENT OF FINANCIAL POSITION AND CASH FLOW STATEMENT
As of 31.03.2021 the total assets of Nordic Fibreboard AS were € 7.8 million (31.03.2020: € 8.5 million). The liabilities of the company as of 31.03.2021 were € 4.6 million (31.03.2020: € 7.5 million), of which Group has borrowings of € 3.2 million as at 31.03.2021 (31.03.2020: € 4.4 million).
Receivables and prepayments amounted to € 1.0 million as at 31.03.2021 (31.03.2020: € 1.4 million). Inventories were € 0.3 million as of 31.03.2021 (31.03.2020: € 0.5 million). Fixed assets were € 6.4 million as of 31.03.2021 (€ 6.6 million as of 31.03.2020).
In 2021 Q1, the Group’s cash flows from operating activities totalled cash inflow of € 196 thousand (2020 Q1: cash inflow € 209 thousand). Investment activities resulted in cash outflows in amount of € 38 thousand in 2021 Q1, compared to outflows in amount € 78 thousand in Q1 2020. Financing activities also resulted in cash outflows of € 53 thousand in Q1 2021 (2020 Q1: cash outflow € 131 thousand). The result of the net cash flow in 2021 Q1 was a cash inflow € 105 thousand, which is an improvement compared to the cash outflow in the amount of € 1 thousand in 2020 Q1.
OUTLOOK
NORDIC FIBREBOARD LTD
The order book from our traditional customers in our largest markets in northern Europe remains strong, with increased demand from many of these markets. This has had the effect of us having to postpone orders from customers from further afield. As a result of this improved demand picture, management is now considering measures for a possible reopening of Püssi factory in the not so distant future.
On the other hand, we are much aware of the continuing uncertainty surrounding the COVID-19 pandemic. We expect to have a clearer picture of the demand situation and the pandemic within the next few months.
PÄRNU RIVERSIDE DEVELOPMENT
We will continue to manage and develop the property on Suur-Jõe Street 48, Pärnu. We expect the current detail planning application for residential development of the Suur-Jõe 48 landplot to be nearing its successful conclusion later this year.
PEOPLE
On the 31.03.2021, the Group employed 97 people (compared to 130 people as of 31.03.2020). The average number of personnel in Q1 2021 was 95 (Q1 2020: 127).
For three months of 2021, wages and salaries with taxes amounted to € 460 thousand (three months 2020: € 587 thousand). Payments made to management board members of all group companies including all subsidiaries with relevant taxes were € 55 thousand in Q1 2021 and € 50 thousand in Q1 2020.
FINANCIAL HIGHLIGHTS
| € thousand | ||
| Income statement | Q1 2021 | Q1 2020 |
| Revenue | 2,846 | 3,206 |
| EBITDA | 484 | (310) |
| EBITDA margin | 17% | (10%) |
| Operating profit | 351 | (462) |
| Operating margin | 12% | (14%) |
| Net profit | 550 | (534) |
| Net margin | 19% | (17%) |
| Statement of financial position | 31.03.2021 | 31.03.2020 |
| Total assets | 7,839 | 8,475 |
| Return on assets | 7% | (6%) |
| Equity | 3,199 | 1,017 |
| Return on equity | 17% | (52%) |
| Debt-to-equity ratio | 59% | 88% |
| Share | 31.03.2021 | 31.03.2020 |
| Last Price* | 0.71 | 0.33 |
| Earnings per share | 0.12 | (0.12) |
| Price-earnings ratio | 5.81 | (2.78) |
| Book value of a share | 0.71 | 0.23 |
| Market to book ratio | 1.00 | 1.46 |
| Market capitalization, € thousand | 3,194 | 1,485 |
| 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 = 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 | 31.03.2021 | 31.12.2020 | 31.03.2020 | 31.12.2019 |
| Cash and cash equivalents (Note 2) | 131 | 26 | 6 | 7 |
| Receivables and prepayments (Note 3) | 975 | 794 | 1,441 | 1,394 |
| Inventories (Note 4) | 329 | 544 | 464 | 894 |
| Total current assets | 1,435 | 1,364 | 1,911 | 2,296 |
| Investment property (Note 5) | 1,134 | 1,134 | 1,125 | 1,121 |
| Financial assets at fair value through profit or loss (Note 8) | 676 | 451 | 378 | 397 |
| Property, plant and equipment (Note 6) | 4,591 | 4,695 | 5,046 | 5,212 |
| Intangible assets (Note 7) | 3 | 6 | 15 | 19 |
| Total non-current assets | 6,404 | 6,286 | 6,564 | 6,749 |
| TOTAL ASSETS | 7,839 | 7,650 | 8,475 | 9,045 |
| Borrowings (Notes 9) | 691 | 756 | 4,367 | 4,547 |
| Payables and prepayments (Notes 10) | 1,282 | 1,574 | 2,850 | 2,665 |
| Short-term provisions (Note 11) | 13 | 18 | 15 | 20 |
| Total current liabilities | 1,986 | 2,348 | 7,231 | 7,232 |
| Long-term borrowings (Notes 9) | 2,493 | 2,493 | 48 | 92 |
| Long-term provisions (Note 11) | 161 | 161 | 179 | 179 |
| Total non-current liabilities | 2,654 | 2,654 | 227 | 271 |
| Total liabilities | 4,640 | 5,002 | 7,458 | 7,503 |
| Share capital (at nominal value) (Note 12) | 450 | 450 | 2,699 | 2,699 |
| Share premium | 0 | 0 | 364 | 364 |
| Statutory reserve capital | 0 | 0 | 288 | 288 |
| Other reserves | 0 | 0 | 94 | 84 |
| Retained earnings (loss) | 2,749 | 2,198 | (2,428) | (1,894) |
| Total equity | 3,199 | 2,648 | 1,017 | 1,542 |
| TOTAL LIABILITIES AND EQUITY | 7,839 | 7,650 | 8,475 | 9,045 |
*The notes to the financial statements presented on pages 14 to 27 are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
| € thousand | Q1 2021 | Q1 2020 |
| Revenue (Note 14) | 2,846 | 3,206 |
| Cost of goods sold (Note 15) | 1,979 | 2,818 |
| Gross profit | 867 | 388 |
| Distribution costs (Note 16) | 342 | 427 |
| Administrative expenses (Note 17) | 172 | 174 |
| Other operating income (Note 19) | 2 | 0 |
| Other operating expenses (Note 19) | 4 | 248 |
| Operating profit (loss) | 351 | (462) |
| Finance income (Note 20) | 225 | 1 |
| Finance costs (Note 20) | 26 | 73 |
| PROFIT (LOSS) BEFORE INCOME TAX | 550 | (534) |
| NET PROFIT (LOSS) FOR THE PERIOD | 550 | (534) |
| Basic earnings per share (Note 13) | 0,12 | (0,12) |
| Diluted earnings per share (Note 13) | 0,12 | (0,12) |
*The notes to the financial statements presented on pages 14 to 27 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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