NORDIC FIBREBOARD Nordic Fibreboard AS Consolidated Interim Report (unaudited) First quarter 2024
First quarter Interim report 2024
NORDIC FIBREBOARD AS
Consolidated Interim Report for the First quarter of 2024
(unaudited)
Beginning of the Interim Report Period: End of the Interim Report Period: Beginning of the financial year:
End of the financial year:
Business name:
Registry code:
Address:
Telephone:
E-mail:
Homepage:
Auditor:
Main activity:
1.01.2024
31.03.2024
1.01.2024
31.12.2024
Nordic Fibreboard AS 11421437
Rääma 31, Pärnu 80044, Estonia +372 44 78 323 group@nordicfibreboard.com www.nordicfibreboard.com AS PricewaterhouseCoopers Production and wholesales of fibreboards
Nordic Fibreboard AS Consolidated Interim Report (unaudited) | |
First quarter 2024 | |
CONTENTS | |
INTERIM FINANCIAL STATEMENTS | 11 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITIONS | 11 |
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME | 12 |
CONSOLIDATED STATEMENT OF CASH FLOWS | 13 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY | 14 |
NOTES TO THE CONSOLIDATED INTERIM REPORT | 15 |
NOTE 1 ACCOUNTING POLICIES AND MEASUREMENT BASES | 15 |
NOTE 2 TRADE AND OTHER RECEIVABLES | 15 |
NOTE 3 INVENTORIES | 16 |
NOTE 4 INVESTMENT PROPERTY | 16 |
NOTE 5 PROPERTY PLANT EQUIPMENT AND RIGHT-OF-USE ASSETS | 17 |
NOTE 6 INTANGIBLE ASSETS | 18 |
NOTE 7 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS | 18 |
NOTE 8 BORROWINGS | 18 |
NOTE 9 PAYABLES AND PREPAYMENTS | 20 |
NOTE 10 PROVISIONS | 20 |
NOTE 11 EQUITY | 21 |
NOTE 12 EARNINGS PER SHARE | 21 |
NOTE 13 SEGMENTS | 22 |
NOTE 14 COST OF GOODS SOLD | 23 |
NOTE 15 DISTRIBUTION COSTS | 23 |
NOTE 16 ADMINISTRATIVE AND GENERAL EXPENSES | 23 |
NOTE 17 LABOUR EXPENSES | 24 |
NOTE 18 OTHER OPERATING EXPENSES | 24 |
NOTE 19 FINANCIAL INCOME AND EXPENSES | 24 |
NOTE 20 RELATED PARTIES | 24 |
Nordic Fibreboard AS Consolidated Interim Report (unaudited)
First quarter 2024
COMPANY PROFILE
Nordic Fibreboard AS is a holding company with subsidiaries Nordic Fibreboard Ltd OÜ and Pärnu Riverside Development OÜ.
Nordic Fibreboard AS main activity is production and wholesale of building materials. In addition it owns a real estate company with one real estate project ongoing in Pärnu, Estonia.
The Group, as of 31.03.2024, therefore consists of the following companies, all 100% owned:
Subsidiary | Location | Activity |
Nordic Fibreboard Ltd OÜ | Estonia | Production and sales |
Pärnu Riverside Development OÜ | Estonia | Rental and property development |
Nordic Fibreboard Ltd OÜ produces and distributes softboard products for use in many different applications, the main categories being within construction (insulation, soundproofing, and interior finishing panels for walls and ceilings) and industry (packaging, expansion joint filler, pin and notice boards, acoustic reduction, cake boards, firelighters).
Pärnu Riverside Development OÜ owns and manages real estate located at Suur-Jõe Street in Pärnu, the Company provides rental service to local companies.
The principal markets of the company are the Nordic and Baltic region. Nordic Fibreboard's customers and partners are well recognized parties within their field of expertise, and value long-term relations with Nordic Fibreboard.
The shares of Nordic Fibreboard AS are listed on the Nasdaq Tallinn Stock Exchange secondary list.
As at 31.03.2024 the Group employed 64 people (31.03.2023: 73 employees).
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Nordic Fibreboard AS Consolidated Interim Report (unaudited)
First quarter 2024
MANAGEMENT REPORT
NORDIC FIBREBOARD AS UNAUDITED RESULTS FOR FIRST QUARTER OF 2024
Consolidated net sales for Q1 2024 were € 1.97 million, which was a 24% decrease compared to the same period last year (Q1 2023: € 2.60 million). The main business area is the production and wholesale of fibreboard, which recorded sales in Q1 2024 of € 1.95 million (Q1 2023: € 2.60 million). The remaining business area is real estate management of the property owned in Suur-Jõe street in Pärnu, who recorded sales of € 0.01 million in Q1 2024 (Q1 2023: also € 0.01 million).
The main reason for the decrease in sales revenue of fiberboard (comparing the Q1 2023 to the Q1 2024) was the termination of supplies to the major customer in Denmark (supplies ended in June
2023). By the end of the Q1 2024, new customers added have replaced 40% of the sales revenue generated by the major Danish customer in the Q1 2023. The company's primary focus remains on finding new customers, with the goal of expanding its customer portfolio and discovering new business directions.
The consolidated EBITDA of Nordic Fibreboard AS for Q1 2024 was positive € 53 thousand (Q1 2024: negative € 94 thousand). EBITDA margin was positive 3% in Q1 2024 (Q1 2023: negative 4%). The Group's gross margin increased from 11% for Q1 2023 to 19% in Q1 2023, the main reason for the increase in the gross margin was the decrease in the prices of the company's input costs.
The consolidated operating loss of Nordic Fibreboard AS for Q1 2024 was € 75 thousand, (Q1 2023: operating profit € 623 thousand, which includes the one-time extraordinary loss from the resale of electricity).
Group`s consolidated net loss therefore for Q1 2024 was € 73 thousand (Q1 2023: loss € 597 thousand). The net loss for the Q1 2024 included the profit from the revaluation of the shares of Trigon Property Development AS (TPD) owned by Nordic Fibreboard Ltd in the amount of € 56 thousand (Q1 2023, the profit from the revaluation of the TPD shares was € 74 thousand).
DIVISIONAL REVIEW
REVENUE BY BUSINESS SEGMENTS
€ thousand | Q1 2024 | Q1 2023 |
Fibreboards production and sales | 1,949 | 2,585 |
Real Estate Management | 12 | 12 |
TOTAL | 1,961 | 2,597 |
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Nordic Fibreboard AS Consolidated Interim Report (unaudited)
First quarter 2024
PROFIT BY BUSINESS SEGMENTS
€ thousand | Q1 2024 | Q1 2023 |
EBITDA by business units: | ||
Fibreboards production and sales | 62 | (76) |
Real Estate Management | (11) | (13) |
Group transactions | 2 | (5) |
TOTAL EBITDA | 53 | (94) |
Depreciation | (128) | (123) |
Extraordinary other operating expense | 0 | (403)* |
TOTAL OPERATING PROFIT/ LOSS | (75) | (623) |
Net financial costs | 2 | 26 |
NET PROFIT/ LOSS | (73) | (597) |
* consists of the one-time loss received from the resale of electricity to the electricity company.
STATEMENT OF FINANCIAL POSITION AND CASH FLOW STATEMENT
As of 31.03.2024 the total assets of Nordic Fibreboard AS were € 9.1 million (31.03.2023: € 9.4 million).
The liabilities of the company as of 31.03.2024 were € 4.8 million (31.03.2023: € 4.9 million), of which
Group has payables of € 1.0 million as at 31.03.2024 (31.03.2023: € 1.2 million) and borrowings of €
3.3 million as at 31.03.2024 (31.03.2023: € 3.1 million).
Receivables and prepayments amounted to € 1.1 million as at 31.03.2024 (31.03.2023: € 1.3 million).
Inventories were € 0.8 million as of 31.03.2024 (31.03.2023: also € 0.8 million). Fixed assets were € 7.3 million as of 31.03.2024 (€ 7.2 million as of 31.03.2023).
The result of the Group's operating activities in the Q1 2024 was a negative cash flow of € 9 thousand (2023 Q1: positive € 166 thousand). The cash flow of investment activities was negative in the amount of € 90 thousand in 2024 Q1, which was due to improvements in production machinery (2023 Q1: outflow € 80 thousand). Financing activities also resulted in cash inflow of € 98 thousand in Q1 2024 (2023 Q1: cash outflow € 41 thousand). Net cash effect during 2024 Q1 cash outflow of € 1 thousand (2023 Q1: cash inflow € 45 thousand).
NORDIC FIBREBOARD LTD: FIBREBOARD PRODUCTIONS AND SALES
Fibreboard sales for Q1 2024 were € 1.95 million (Q1 2023: € 2.59 thousand). The main reason for the decrease in sales revenue in the Q1 2024, compared to the Q1 2023, was the termination of deliveries to a major customer in Denmark in the month of June 2023. In Q1 2023, sales to Denmark customer accounted for 32% of total sales. Sales to Estonia decreased by 22% in the Q1 2024 compared to the same period last year, and sales to Latvia decreased by 18%, while sales to other European Union countries increased by 107% and sales to African clients began to recover.
The consolidated EBITDA of Nordic Fibreboard Ltd OÜ for Q1 2024 was positive € 62 thousand (Q1 2023: negative € 76 thousand). The increase in EBITDA was due to a decrease in input costs, which in turn proportionally reduced the cost of production.
FIBREBOARD SALES BY GEOGRAPHICAL SEGMENTS
€ thousand | Q1 2024 | Q1 2023 |
European Union | 1,692 | 2,455 |
Africa | 167 | 53 |
Asia | 61 | 31 |
Middle East | 15 | 0 |
Other | 14 | 46 |
TOTAL | 1,949 | 2,585 |
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Nordic Fibreboard AS Consolidated Interim Report (unaudited)
First quarter 2024
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 € 12 thousand in Q1 2024, (Q1 2023: also € 12 thousand).
The real estate management EBITDA for Q1 2024 were negative € 11 thousand (Q1 2023: negative € 13 thousand).
OUTLOOK
NORDIC FIBREBOARD LTD
The construction materials market and industrial sector continue to face challenges and general forecasts for the year 2024 do not show a rapid recovery of the market. Although there are some signs of recovery in the market, volume growth remains modest.
Nordic Fibreboard AS is developing a business development strategy aimed at expanding the company's value proposition not only in the construction market but also through strategic activities to gain market share in new business directions in the long term.
The company is mapping out the needs for both team and other supporting resource development to support the implementation of its long-term business development strategy and achieve set goals, which include increasing production volumes and continuously developing the company's value proposition.
The company continues to actively invest in product development to ensure its sustainability and growth in the market. Several important product development projects are in progress or planned, which would expand the product range and increase the application areas of our products, thereby allowing for the expansion of the customer portfolio.
PÄRNU RIVERSIDE DEVELOPMENT
We will continue to manage and develop the property on Suur-Jõe Street 48, Pärnu. A detail plan for the property has been completed, with the intention of converting the property into a residential property.
PEOPLE
On the 31.03.2024, the Group employed 64 people (as of 31.03.2023, 73 people). The average number of personnel in Q1 2024 was 65 (Q1 2023: 73).
For three months of 2024, wages and salaries with taxes amounted to € 393 thousand (three months 2023: € 436 thousand). Payments made to management board members of all group companies including all subsidiaries with relevant taxes were € 59 thousand in Q1 2024 and € 60 thousand in Q1 2023.
The Group`s definition of labour costs includes payroll expenses (incl. holiday pay) with additional remuneration fees, payroll taxes, special benefits and taxes calculated on special benefits.
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Nordic Fibreboard AS Consolidated Interim Report (unaudited)
First quarter 2024
FINANCIAL HIGHLIGHTS
€ thousand | ||
Income statement | Q1 2024 | Q1 2023 |
Revenue | 1,961 | 2,597 |
EBITDA | 53 | (94) |
EBITDA margin | 3% | (4%) |
Operating profit | (75) | (623) |
Operating margin | (4%) | (24%) |
Net profit | (73) | (597) |
Net margin | (4%) | (23%) |
Statement of financial position | 31.03.2024 | 31.03.2023 |
Total assets | 9,090 | 9,368 |
Return on assets | (1%) | (6%) |
Equity | 4,329 | 4,487 |
Return on equity | (2%) | (13%) |
Debt-to-total assets ratio | 52% | 52% |
Share | 31.03.2024 | 31.03.2023 |
Last Price (€)* | 0.79 | 1.52 |
Earnings per share (€) | (0.04) | 0.11 |
Price-earnings ratio | (22.57) | 14.05 |
Book value of a share (€) | 0.96 | 1.00 |
Market to book ratio | 0.82 | 1.52 |
Market capitalization (€ thousand) | 3,554 | 6,816 |
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-total assets 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/
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Nordic Fibreboard AS Consolidated Interim Report (unaudited)
First quarter 2024
FINANCIAL RISKS
INTEREST RATE RISK
Interest rate risk is the risk that the future cash flows of financial instruments will fluctuate because of changes in market interest rates. The interest rate risk of Nordic Fibreboard AS depends on a possible change in EURIBOR (Euro Interbank Offered Rate), since some of the Group`s loans are linked to EURIBOR, the Group`s financial cost also increase when the interest rate increases. At 31.03.2024 six months' EURIBOR rate was 3.851 % and at 31.03.2023 3.341%. The loan from the Rural Development Foundation is concluded with a fixed interest rate, thus bear no interest rate risk. However, the Group loan from Coop Pank AS does have a floating interest rate, but the management is of the opinion that the floating interest rate will not bear significant impact to Group's cash flows.
The dates for fixing interest rates on the basis of changes in EURIBOR are the 30th day of every six months for its bank loans.
The interest rate risk also depends on the overall economic situation in Estonia and in the euro zone. Nordic Fibreboard AS has a cash flow risk arising from the interest rate risk because one loan have a floating interest rate. Management believes that the cash flow risk is not significant, therefore no hedging instruments are used.
FOREIGN CURRENCY EXCHANGE RISK
The foreign exchange risk is the risk that the company may have significant loss because of fluctuating foreign exchange rates. Nordic Fibreboard has no operations outside of the euro zone and most of our export-import contracts to customers outside of the eurozone are nominated in euros. The production has been sold and raw materials for production has mainly been purchased in euros.
RISK OF THE ECONOMIC ENVIRONMENT
In 2024, businesses are facing several challenges that may impact their operations and results. The first important risk of the economic environment is insufficient economic growth, which can put pressure on the revenues and profits of companies. This can stem from various factors, including domestic demand, investment interests, and exports. The construction, renovation, and industrial sectors are particularly vulnerable as their activities are closely linked to economic growth and consumption. If economic growth falls below expectations, it may affect the recovery and further development of these sectors.
Geopolitical tensions are a persistent risk that can affect economic activity in several ways, leading for example to trade restrictions, which in turn can affect companies' sourcing of raw materials and sales. Additionally, these tensions can increase consumer uncertainty and lead to decreased consumption, which in turn, affects companies' revenues.
Management is aware of these risks and is implementing strategies to mitigate and adapt to them. This includes developing strategies to reduce dependence on certain sectors or geographical areas and diversifying supply chains.
FAIR VALUE
The management estimates that the fair values of cash, accounts receivables and payables, short-term loans and borrowings do not materially differ from their carrying amounts. The fair values of long-term loans do not materially differ from their carrying amounts because their interest rates correspond to the interest rate risks prevailing on the market.
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Nordic Fibreboard AS Consolidated Interim Report (unaudited)
First quarter 2024
LIQUIDITY RISK
The liquidity risk is a potential loss arising from the existence of limited or insufficient financial resources that are necessary for performing the obligations related to the activities of the Group. The Management Board continuously monitors cash flow movements, using the existence and sufficiency of the Group's financial resources for performing the assumed obligations and financing the strategic objectives of the Group.
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Nordic Fibreboard AS Consolidated Interim Report (unaudited)
First quarter 2024
DECLARATION OF THE MANAGEMENT BOARD
The management board has prepared the management report and the consolidated financial interim statements of Nordic Fibreboard AS for the first quarter 2024.
The management board confirms that the management report on pages 4-9 provides a true and fair view of the business operations, financial results and financial condition of the parent company and the entities included in consolidation.
The management board confirms that according to their best knowledge the consolidated financial interim report on pages 11-25 presents a fair view of the assets, liabilities, financial position and profit or loss of the issuer and the entities involved in the consolidation as a whole according to the International Financial Reporting Standards as they are adopted by the European Union and contains a description of the main risks.
Enel Äkke
Member of the Management Board............................................
Kevin Gustasson
Member of the Management Board............................................
Kristjan Erm
Member of the Management Board............................................
Pärnu, May 10, 2024
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Nordic Fibreboard AS published this content on 10 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 May 2024 14:18:07 UTC.
