Strong quarter despite increased uncertainty
SECOND QUARTER
The second quarter of the year was strong in terms of profitability and EBITDA amounted to
The improved result compared to the previous year is explained by higher sales prices for Sawn Wood, increased sales volumes within Joinery and improved earnings for the pellet business as a result of higher sales prices and volumes. Lower demand in the do-it-yourself market along with higher raw material costs lowered the result for Wood Protection.
MARKET
The market has been characterized by increased concern about the effects of the war in
The market for sawn timber products continues to be volatile. After the winter's sharp price increases, we now have a market with falling prices. The sanctions for Russian timber products decided on in March did not enter into force until the beginning of July. This has meant that timber deliveries from
As an effect of increased energy costs, we see an increased interest in heating pellets where prices rise sharply.
Bergs has a good raw material situation and supply to all units and non-delivery of Russian wood products is compensated by increased deliveries from other established suppliers.
PERFORMANCE BY PRODUCT AREA
WOODPROTECTION
Increased raw material costs and the decline in the do-it-yourself market had a negative impact on margins during the quarter. The market for professional construction remains good and order intake is normal for the autumn. Our efforts towards increased market presence and product development continue. The strategy for our Latvian wood protection business, which has had a large part of its raw material supply from
JOINERY
Demand for windows and doors remains good and order intake remains at a good level. Increased costs for raw materials and logistics have been offset by increased selling prices. We continue the expansion of our Timber Windows brand and the plan for five new showrooms during the year remains in place. Demand for garden products remains good although we are seeing some decline from the do-it-yourself sector.
SAWNWOOD
High sales prices and high-capacity utilization characterized the business during the quarter. Even though raw material prices in the Baltics have risen during the winter and spring, the margin in the business is good. Our finished goods inventories remain low. However, the market for sawn timber products is more uncertain for the autumn and prices are falling. The effect of this is expected to be partially offset by reduced raw material prices and increased prices for by-products such as wood chips and sawdust.
OTHER (ENERGY & LOGISTICS)
In the wake of increased costs for energy, the market for pellets has improved markedly during the first half of the year. Inventory levels are very low and prices are rising. After a weak development in 2021, we now see improved margins for our pellet business.
ACQUISITIONS
On
100 employees. Pinus has for about 20 years been a supplier to our English subsidiary Timber Windows. The acquisition represents an investment in a new geographic market for Bergs. The acquisition, combined with the recently expanded production capacity in
OUTLOOK
There is clear uncertainty about how the world economy will develop during the rest of the year. Interest rates will certainly be raised in the autumn. Even if the increases are from a low level, this will cool down the economy and in the short term affect the demand for our products as well.
We continue to have a good order backlog for most of our products. At the same time, we are prepared to adapt production and costs to a possible decline in demand.
The market for sawn timber products is affected by lower demand. At the same time, it is difficult to assess the market effects of
non-delivery from
We expect a positive cash flow for the rest of the year.
President and CEO
SECOND QUARTER (1 APRIL-30 JUNE)
- Net sales increased by 22% to
SEK 1,009 million (826). The increase was related to higher sales prices for all products and higher sales volumes in Joinery. -
EBITDA amounted to
SEK 173 million (146). The increase was explained by higher sales prices for Sawn Wood, increased sales volumes within Joinery and improved earnings for the pellet business. Lower sales volumes and higher raw material costs lowered the result for Wood Protection. The EBITDA margin was 17.1% (17.7). -
Operating profit amounted to
SEK 151 million (128), corresponding to an operating margin of 15.0% (15.5). -
Profit for the period amounted to
SEK 153 million (118). -
Earnings per share, before and after dilution, were
SEK 4.41 (3.40). -
Cash flow from operating activities amounted to
SEK -18 million (27), negatively affected by a higher level of working capital. -
Financial net debt totalled
SEK 278 million (263) as of 30 June, corresponding to a net debt/equity ratio of 0.16 (0.19). - A consolidation of shares (reverse split) was made in May, whereby ten (10) shares were consolidated into one (1) share.
INTERIM PERIOD (1 JANUARY-30 JUNE)
- Net sales increased by 35% to
SEK 1,919 million (1,416). The increase was related to higher sales prices for all products and higher sales volumes in Joinery. -
EBITDA amounted to
SEK 255 million (211). The increase was explained by higher sales prices for Sawn Wood, increased sales volumes within Joinery and improved earnings for the pellet business. Wood Protection was negatively affected by lower sales volumes and higher raw material costs. The EBITDA margin was 13.3% (14.9). -
Operating profit amounted to
SEK 212 million (175), corresponding to an operating margin of 11.0% (12.3). -
Profit for the period amounted to
SEK 216 million (171). -
Earnings per share, before and after dilution, were
SEK 6.23 (4.93). -
Cash flow from operating activities amounted to
SEK 106 million (-81). -
A new loan agreement was made with
Danske Bank and SEB. The total credit facilities amount toSEK 650 million and have a three-year term. Performance Timber Products Group acquired all shares in the English companyP&P Holdings Limited that sells, distributes and installs windows and doors inSurrey andSouth West London .
Further information regarding the interim report can be provided by the CEO,
The information in this interim report is such that
Tel: +46 (0)10-199 84 00
About Bergs
An international wood products Group
With years of experience in wood and a great deal of competence in processing, Bergs promotes building a sustainable society based on renewable raw materials from sustainably cultivated forests in the
Operations are conducted in
The company's share has been listed on Nasdaq Stockholm since 1984
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