Nordic Fibreboard

Annual Report • Feb 29, 2024

Company Nordic Fibreboard AS

Type Company Release

Category Management interim statement or quaterly financial report

Disclosure time 29 Feb 2024 16:16:10 +0200

Attachments:

• NORDIC FIBREBOARD AS_Interim Report Q4 2023.pdf (http://oam.fi.ee/en/download?id=8112)
• NORDIC FIBREBOARD AS Vahearuanne 4 kvartal 2023.pdf (http://oam.fi.ee/en/download?id=8113)

Currency

Title

Unaudited financial report of Nordic Fibreboard AS for the fourth quarter and 12 months of

MANAGEMENT REPORT

Consolidated net sales for Q4 2023 were EUR 1.31 million (Q4 2022: EUR 2.03 million). The main business area is Nordic Fibreboard Ltd, the production and wholesale of fibreboard, which recorded sales in Q4 2023 of EUR 1.30 million, (Q4 2022: EUR 2.02 million). The remaining business area is the management of the property on Suur-Jõe street in Pärnu through the company Pärnu Riverside Development OÜ, whose sales revenue in the 4th quarter of 2023 was EUR12 thousand (Q4 2022: EUR 11 thousand).

The decline in Nordic Fibreboard's sales during the fourth quarter of 2023 was primarily influenced by a slowdown in new construction and renovation activities due to the winter season, along with global economic uncertainty affecting both end-users and industrial-oriented business customers. Nordic Fibreboard Ltd had sales of EUR 1.30 million in Q4 2023, marking a 35% decrease from Q4 2022.

The consolidated EBITDA of Nordic Fibreboard for Q4 2023 was EUR 245 thousand, the EBITDA margin was 19% (Q4 2022: EBITDA was EUR 661 thousand and the EBITDA margin was 33%). Compared to the Q4 2022 the Group`s gross margin decreased from 13% to 9% in the Q4 2023.

In Q4 2023, a revaluation of the fair value of real estate investment properties was conducted, relying on expert assessments prepared by an external appraiser, resulting in a profit of 404 thousand euros. (in the Q4 2022, a profit from the revaluation of real estate investments was 697 thousand euros).

Financial expenses for the Q4 2023 were EUR 237 thousand, of which EUR 54 thousand were loan interest costs and EUR 183 thousand were losses from the revaluation of Trigon Property Development (TPD) shares. Total financial income of EUR 150 thousand was recorded in Q4 2022, which consisted of the dividends received from

TPD shares in the amount of EUR 24 thousand and losses from the revaluation of the same TPD shares in the amount of EUR 143 thousand and the interest expense of loan obligations in the amount of EUR 31 thousand.

Group`s consolidated net loss for Q4 2023 was EUR 115 thousand (Q4 2022: profit EUR 386 thousand).

DIVISIONAL REVIEW

Revenue by business segments

EUR thousand -----------------------------------+---------+---------+----------+----------				Q4 2023 Q4 2022 12M 2023 12M 2022
Fibreboards production and sales	1,300	2,020	7,657	11,035
-----------------------------------+---------+---------+----------+---------- Real Estate Management	12	11	47	39
-----------------------------------+---------+---------+----------+---------- TOTAL	1,312	2,031	7,704	11,074

Profit by business segments

EUR thousand	Q4 2023 Q4 2022 12M 2023 12M 2022
---------------------------------------+-------+-------+--------+-------- EBITDA by business units:
---------------------------------------+-------+-------+--------+-------- Fibreboards production and sales	127	(23)	510	1,092
---------------------------------------+-------+-------+--------+-------- Real Estate Management	132	690	113	672
---------------------------------------+-------+-------+--------+-------- Group transactions	(14)	(6)	(44)	(32)
---------------------------------------+-------+-------+--------+-------- TOTAL EBITDA	245	661	579	1,732
---------------------------------------+-------+-------+--------+-------- Extraordinary other operating expenses		0 0	(406)	0
---------------------------------------+-------+-------+--------+-------- Depreciation	(123)	(125)	(489)	(497)
---------------------------------------+-------+-------+--------+-------- TOTAL OPERATING PROFIT/ LOSS	122	536	(316)	1,235
---------------------------------------+-------+-------+--------+-------- Net financial costs	(237)	(150)	(366)	(1)
---------------------------------------+-------+-------+--------+-------- NET PROFIT/ LOSS	(115)	386	(682)	1,234

NORDIC FIBREBOARD LTD: fibreboard production and sales

Fibreboard sales in Q4 2023 were EUR 1.30 million (Q4 2022: EUR 2.02 million). In Q4 2023, the main reason behind the decrease in sales revenue compared to Q4 2022 was the termination of the agreement with the primary customer in Denmark, which led to a decrease in sales by 24% compared to Q4 2022. In addition, sales in

Finland decreased by 23% and sales in Latvia decreased by 47% in Q4 2023 compared to the same period in 2022. As a positive development, the company has successfully reestablished cooperation with former export customers and has also secured new customers in both the Middle East and the European Union. As a result, in Q4 2023 compared to Q4 2022, sales in Sweden have increased by 41%, and sales in Africa and Asia have recovered.

The EBITDA of the fiberboard segment for the Q4 2023 was a positive EUR 127 thousand, which is a quarterly improvement compared to the EBITDA for the Q4 2022, which was a negative EUR 23 thousand, but when comparing EBITDA for the twelve months of 2023 with the 2022 with the same period, the drop is 53%. The main reason for the decline can be attributed to the exceptionally high electricity prices in early 2023, which had a significant impact on the company. The situation was alleviated by the implementation of a new electricity contract in April 2023, which provided more favorable terms for purchasing electricity.

	EUR thousand		EUR thousand +---------+---------+----------+----------
			Q4 2023 Q4 2022 12M 2023 12M 2022
-----------------+---------+---------+----------+---------- European Union	1,120	1,871	6,974	10,297
-----------------+---------+---------+----------+---------- Africa	64	0	197	0
-----------------+---------+---------+----------+---------- Middle East	41	82	137	154
-----------------+---------+---------+----------+---------- Asia	11	0	113	69
-----------------+---------+---------+----------+---------- Russia	0	0	0	427
-----------------+---------+---------+----------+---------- Other	64	67	236	88
-----------------+---------+---------+----------+---------- TOTAL	1,300	2,020	7,657	11,035

Fibreboard sales by geographical segments

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 12 thousand in Q4 2023, (Q4 2022: EUR 11 thousand).

The real estate management EBITDA for Q4 2023 were positive EUR 132 thousand (Q4 2022: EBITDA was positive EUR 690 thousand). As of the end of 2023 and 2022, fair value revaluations of the real estate investment object located at 48 Suur-Jõe Street in Pärnu was conducted, resulting in an income of EUR 142 thousand in the Q4 2023 and the income of the Q4 2022 was EUR 697 thousand.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AND CASH FLOW STATEMENT

As of 31.12.2023 the total assets of Nordic Fibreboard AS were EUR 8.5 million (31.12.2022: 9.4 million). The liabilities of the company as of 31.12.2023 were EUR 4.2 million (31.12.2022: EUR 4.3 million), of which the Group has payables of EUR 0.5 million as at 31.012.2023 (31.12.2022: EUR 0.5 million) and borrowings of EUR 3.2 million as at 31.12.2023 (31.12.2022: also EUR 3.2 million).

Receivables and prepayments amounted to EUR 0.5 million as at 31.12.2023 (31.12.2022: EUR 0.6 million). Inventories were EUR 0.7 million as of 31.12.2023 (31.12.2022: EUR 1.7 million). Fixed assets were EUR 7.2 million as of 31.12.2023 (EUR 7.2 million as of 31.12.2022).

During 2023 twelve months, the Group's cash flows from operating activities totalled EUR 266 thousand (2022 twelve months: EUR 152 thousand). Cash outflows due to investment activities was EUR 257 thousand during 2023 twelve months, mainly consisting of investments into production assets of EUR 251 thousand and real estate investments of EUR 6 thousand (2022 twelve months: cash outflow EUR 129 thousand). Financing activities also resulted in cash outflows of EUR 4 thousand during 2023 twelve months (2022 twelve months: cash outflow EUR 78 thousand). Net cash effect during 2023 twelve months cash inflow of EUR 7 thousand, (2021 twelve months: cash outflow EUR 55 thousand).

OUTLOOK

Nordic Fibreboard Ltd

The building materials market is experiencing modest demand overall, with an uncertain short-term outlook. Operating in such a challenging market environment, forecasting future trends is difficult, and market stability is elusive. High interest rates, ongoing economic uncertainty, and international tensions are influencing the purchasing decisions and business plans of both consumers and businesses. These factors have led to a slowdown in the construction and renovation market, affecting both consumers and businesses.

However, there are signs of customer interest recovery in certain markets, and the company has secured agreements with some new customers, providing hope for some recovery of sales volume. Currently, the company's primary focus is on finding new customers to expand its customer portfolio. Meanwhile, the company continues to actively contribute to product development to ensure the sustainability of its operations and growth in the market.

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 private residential property.

FINANTSIAL HIGHLIGHTS

EUR thousand

Income statement Q4 2023 Q4 2022 12M 2023 12M 2022
-------------------+---------+---------+----------+---------- Revenue	1,312	2,031	7,704	11,074
-------------------+---------+---------+----------+---------- EBITDA	245	661	579	1,732
-------------------+---------+---------+----------+---------- EBITDA margin	19%	33%	8%	16%
-------------------+---------+---------+----------+---------- Operating profit	122	536	(316)	1,235
-------------------+---------+---------+----------+---------- Operating margin -------------------+---------+---------+----------+----------	9%	26%	(4%)	11%
Net profit -------------------+---------+---------+----------+----------	(115)	386	(682)	1,234
Net margin	(9%)	19%	(9%)	11%

Statement of financial position ------------------------------------+------------+------------	31.12.2023 31.12.2022
Total assets ------------------------------------+------------+------------	8,505	9,408
Return on assets ------------------------------------+------------+------------	(8%)	13%
Equity ------------------------------------+------------+------------	4,402	5,084
Return on equity ------------------------------------+------------+------------	(16%)	24%
Debt-to-equity ratio	48%	46%

Share		31.12.2023 31.12.2022
------------------------------------+------------+------------ Last Price (EUR)* ------------------------------------+------------+------------		0.90	1.60
Earnings per share (EUR) ------------------------------------+------------+------------		(0.15)	0.27
Price-earnings ratio ------------------------------------+------------+------------		(5.93)	5.83
Book value of a share (EUR)		0.98	1.13
------------------------------------+------------+------------ Market to book ratio		0.92	1.42
------------------------------------+------------+------------ Market capitalization, EUR thousand		4,049	7,198

------------------------------------+------------+------------
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 shares *http://www.nasdaqbaltic.com/

CONSOLIDATED STATEMENT OF FINANCIAL POSITIONS

EUR thousand			31.12.2023 31.12.2022 31.12.2021
----------------------------------------------+----------+----------+---------- Cash and cash equivalents		7 2	57
----------------------------------------------+----------+----------+---------- Receivables and prepayments (Note 2) ----------------------------------------------+----------+----------+----------	534	559	902
Inventories (Note 3) ----------------------------------------------+----------+----------+----------	728	1,672	390
Total current assets ----------------------------------------------+----------+----------+----------	1,269	2,233	1,349
----------------------------------------------+----------+----------+----------
Investment property (Note 4) ----------------------------------------------+----------+----------+----------	2,269	1,859	1,152
Financial assets at fair value through profit or loss (Note 7) ----------------------------------------------+----------+----------+----------	491	644	644
Property, plant, equipment and right-of-use assets (Note 5)	4,475	4,670	4,915
----------------------------------------------+----------+----------+---------- Intangible assets (Note 6)		1 2	3
----------------------------------------------+----------+----------+---------- Total non-current assets	7,236	7,175	6,714
----------------------------------------------+----------+----------+---------- ----------------------------------------------+----------+----------+----------
TOTAL ASSETS ----------------------------------------------+----------+----------+----------	8,505	9,408	8,063

----------------------------------------------+----------+----------+---------- Borrowings (Notes 8) ----------------------------------------------+----------+----------+----------	756	290	146
Payables and prepayments (Notes 9) ----------------------------------------------+----------+----------+----------	756	1,014	829
Short-term provisions (Note 10) ----------------------------------------------+----------+----------+----------	21	18	19
Total current liabilities ----------------------------------------------+----------+----------+----------	1,533	1,322	994
----------------------------------------------+----------+----------+----------
Long-term borrowings (Notes 8)	2,459	2,875	3,074
----------------------------------------------+----------+----------+---------- Long-term provisions (Note 10)	111	127	145
----------------------------------------------+----------+----------+---------- Total non-current liabilities ----------------------------------------------+----------+----------+----------	2,570	3,002	3,219
Total liabilities ----------------------------------------------+----------+----------+----------	4,103	4,324	4,213
----------------------------------------------+----------+----------+----------
Share capital (at nominal value) (Note 11)	450	450	450
----------------------------------------------+----------+----------+---------- Statutory reserve capital	45	45	0
----------------------------------------------+----------+----------+---------- Retained earnings (loss) ----------------------------------------------+----------+----------+----------	3,907	4,589	3,400
Total equity	4,402	5,084	3,850
----------------------------------------------+----------+----------+---------- ----------------------------------------------+----------+----------+----------
TOTAL LIABILITIES AND EQUITY	8,505	9,408	8,063

*The notes to the financial statements presented on pages 15 to 26 are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

EUR thousand -------------------------------------+-------+-------+--------+--------				Q4 2023 Q4 2022 12M 2023 12M 2022
Revenue (Note 13) -------------------------------------+-------+-------+--------+--------	1,312	2,031	7,704	11,074
Cost of goods sold (Note 14)	1,313	1,890	6,810	9,024
-------------------------------------+-------+-------+--------+-------- Gross profit	(1)	141	894	2,050
-------------------------------------+-------+-------+--------+--------
-------------------------------------+-------+-------+--------+--------

Distribution costs (Note 15) -------------------------------------+-------+-------+--------+--------	137	193	673	1,112
Administrative expenses (Note 16)	141	109	514	424
-------------------------------------+-------+-------+--------+-------- Other operating income (Note 18)	404	697	404	730
-------------------------------------+-------+-------+--------+-------- Other operating expenses (Note 18)	3	0	427	9
-------------------------------------+-------+-------+--------+-------- Operating profit (loss)	122	536	(316)	1,235
-------------------------------------+-------+-------+--------+--------
-------------------------------------+-------+-------+--------+-------- Finance income (Note 19)	0	24		0 129
-------------------------------------+-------+-------+--------+-------- Finance costs (Note 19)	237	174	366	130
-------------------------------------+-------+-------+--------+-------- PROFIT (LOSS) BEFORE INCOME TAX	(115)	386	(682)	1,234
-------------------------------------+-------+-------+--------+--------
-------------------------------------+-------+-------+--------+-------- NET PROFIT (LOSS) FOR THE PERIOD -------------------------------------+-------+-------+--------+--------	(115)	386	(682)	1,234
-------------------------------------+-------+-------+--------+-------- Basic earnings per share (Note 12)	(0.03)	0.09	(0.15)	0.27
-------------------------------------+-------+-------+--------+-------- Diluted earnings per share (Note 12) (0.03)		0.09	(0.15)	0.27

*The notes to the financial statements presented on pages 15 to 26 are an integral part of these consolidated financial statements.

Enel Äkke Member of Management Board +372 55525550 group@nordicfibreboard.com