Nordic Fibreboard

Quarterly Report • Mar 1, 2023

Fourth quarter and 12 months Interim report 2022

NORDIC FIBREBOARD AS

Consolidated Interim Report for the Fourth quarter and 12 months of 2022 (unaudited)

Beginning of the Interim Report Period:	1.10.2022
End of the Interim Report Period:	31.12.2022
Beginning of the financial year:	1.01.2022
End of the financial year:	31.12.2022
Business name:	Nordic Fibreboard AS
Registry code:	11421437
Address:	Rääma 31, 80044 Pärnu, Estonia
Country of incorporation:	Republic of Estonia
Telephone:	+372 44 78 323
E-mail:	group@nordicfibreboard.com
Homepage:	www.nordicfibreboard.com
Auditor:	AS PricewaterhouseCoopers
Main activity:	Production and wholesales of fibreboards

COMPANY PROFILE

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. Nordic Fibreboard AS is a holding company with subsidiaries Nordic Fibreboard Ltd OÜ, Pärnu Riverside Development OÜ and Skano Furniture OÜ. Skano Furniture OÜ has had no activities for the last couple of years and was liquidated after the balance sheet date of 31.12.2022 on 18.01.2023.

The Group, as of 31.12.2022, 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
Skano Furniture OÜ	Estonia	Retail (liquidated on 18.01.2023)

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, door cores, 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 48 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 31.12.2022 the Group employed 74 people (31.12.2021: 91 people).

3

MANAGEMENT REPORT

NORDIC FIBREBOARD AS UNAUDITED RESULTS FOR FOURTH QUARTER AND 12 MONTHS OF 2022

Consolidated net sales for Q4 2022 were € 2.03 million (down from € 2.34 million in Q4 2021). The main business area of production and wholesale of fibreboard recorded sales in Q4 2022 of € 2.02 million, 12% down from sales in Q4 2021. The remaining business area is real estate management of the property owned in Suur-Jõe Street in Pärnu, who recorded sales of € 11 thousand in Q4 2022 (Q4 2021: 36 thousand).

Consolidated sales for the full year 2022 was € 11.07 million, which is an increase of 10% compared to 2021 full year sales of € 10.10 million. The reason for such sales increase is due to increased sales of fibreboards in our key markets such as Finland, Denmark, Estonia and Latvia. However, the Group's gross margin fell from 33% for full year 2021 to becoming 23% for full year 2022, the main reasons being the increased prices of raw materials in the fibreboard production, these being woodchips and energy.

The consolidated EBITDA of Nordic Fibreboard AS was € 661 thousand for Q4 2022 (Q4 2021: EBITDA € 215 thousand). The increase in EBITDA in Q4 2022 was due to the revaluation of the fair value of the investment property in the real estate management segment, adding € 697 thousand to EBITDA and thus increasing EBITDA margin in Q4 2022 compared to Q4 2021 from 9% to 33%. The Fibreboard segment reported negative EBITDA of € 23 thousand in Q4 2022 (Q4 2021: € 218 thousand) due to higher woodchip prices and less output due to slowdown in demand at the end of the year. The consolidated EBITDA for the full year 2022 was € 1.73 million, which is an increase of 11% compared to full year 2021.

Consolidated net profit for Q4 2022 was € 386 thousand, which includes dividend income of € 24 thousand from the fibreboard division's 20% ownership stake in Trigon Property Development AS (TPD). In Q4 2021, we recorded a loss € 27 thousand on the revaluation of this shareholding. Net profit for full year 2022 was € 1.23 million, which includes total year 2022 dividend income from TPD shares of € 129 thousand (full year 2021: profit € 1.20 million).

DIVISIONAL REVIEW

REVENUE BY BUSINESS SEGMENTS

€ thousand	Q4 2022	Q4 2021	12M 2022	12M 2021
Fibreboards production and sales	2,020	2,304	11,035	9,842
Real Estate Management	11	36	39	254
TOTAL	2,031	2,339	11,074	10,096
PROFIT BY BUSINESS SEGMENTS

€ thousand	Q4 2022	Q4 2021	12M 2022	12M 2021
EBITDA by business units:
Fibreboards production and sales	(23)	218	1,092	1,555
Real Estate Management	690	5	672	15
Group transactions	(6)	(8)	(32)	(13)
TOTAL EBITDA	661	215	1,732	1,557
Depreciation	(125)	(118)	(497)	(498)
TOTAL OPERATING PROFIT/ LOSS	536	97	1,235	1,059
Net financial costs	(150)	(124)	(1)	143
NET PROFIT/ LOSS	386	(27)	1,234	1,202

NORDIC FIBREBOARD LTD: FIBREBOARD PRODUCTION AND SALES

Fibreboard sales in Q4 2022 were € 2.02 million (Q4 2021: € 2.30 million). The decrease in sales in Q4 2022 was due to a substantial reduction in demand in our main local markets, such drop being a reflection of the uncertainty created by the war in Ukraine, increased interest rates, and higher energy prices.

The operating profitability, ie EBITDA, of the Nordic Fibreboard Ltd activities in Q4 2022 was negative € 23 thousand (Q4 2021: positive € 218 thousand). This being caused by increased cost prices for woodchips, company´s main raw material, as well as higher electricity prices in the second half of 2022.

The EBITDA of fibreboard for the full year in 2021 was € 1.09 million (full year in 2021: € 1.55 million).

FIBREBOARD SALES BY GEOGRAPHICAL SEGMENTS

	€ thousand		€ thousand
	Q4 2022	Q4 2021	12M 2022	12M 2021
European Union	1,871	1,992	10,297	8,225
Middle East	82	0	154	13
Russia	0	273	427	1,356
Asia	0	23	69	147
Africa	0	0	0	46
Other	67	16	88	55
TOTAL	2,020	2,304	11,035	9,842

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 € 11 thousand in Q4 2022, (Q4 2021: € 36 thousand). The reason for the decrease in sales revenue was caused by the loss of the largest tenant at the end of 2021.

The real estate management EBITDA for Q4 2022 were € 690 thousand (Q4 2021: € 5 thousand). The reason for such a large change in EBITDA is the income received from the fair value revaluation of the real estate investment object located at Suur-Jõe Street 48 in Pärnu in the amount of € 697 thousand at the end of 20222

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AND CASH-FLOW

As of 31.12.2022 the total assets of Nordic Fibreboard AS were € 9.4 million (31.12.2021: 8.1 million). The liabilities of the company as of 31.12.2022 were € 4.3 million (31.12.2021: € 4.2 million), of which the Group has payables of € 0.5 million as at 31.012.2022 (31.12.2021: € 0.4 million) and borrowings of € 3.2 million as at 31.12.2022 (31.12.2021: also € 3.2 million).

Receivables and prepayments amounted to € 0.6 million as at 31.12.2022 (31.12.2021: € 0.9 million). Inventories were € 1.7 million as of 31.12.2022 (31.12.2021: € 0.4 million). Fixed assets were € 7.2 million as of 31.12.2022 (€ 6.7 million as of 31.12.2021).

During 2022 twelve months, the Group's cash flows from operating activities totalled € 152 thousand (2021 twelve months: € 730 thousand). Cash outflows due to investment activities was € 129 thousand during 2022, mainly consisting of investments into production assets of € 254 thousand and dividend received from TPD shares of € 129 thousand (2021: cash outflow € 587 thousand). Financing activities also resulted in cash outflows of € 78 thousand during 2022 (2021: cash outflow € 112 thousand). Net cash effect during 2022 twelve months cash outflow of € 55 thousand, (2021: cash inflow € 31 thousand).

PEOPLE

On the 31st of December 2022, the Group employed 74 people (compared to 91 people as of 31.12.2021). The average number of personnel in Q4 2022 was 82 (Q4 2021: 96).

Labour costs were € 0.52 million including taxes in Q4 2022 and € 2.05 million for twelve months of 2022 (Q4 2021: € 0.52 million, 12M 2021: € 1.97 million). Group fees for the members of the management boards of holding company and its subsidiaries, together with taxes, were € 70 thousand in Q4 2022 and € 267 thousand for twelve months of 2022 (Q4 2021: € 79 thousand, 12M 2021: € 245 thousand).

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.

OUTLOOK

NORDIC FIBREBOARD LTD

As a result of the declining demand during Q4 2022, company decided to undertake major maintenance work of the factory at the start of 2023, thus delaying reopening of the production line until 20 February 2023. This also gave the opportunity to sell off excessive inventory. During the last few weeks, before the release of the report, we have observed an increase in demand, which we attribute to more market macro certainties, such as less unpredictable energy prices and a downturn in inflation. The pricing of the company´s main raw material, woodchips, seem to be easing somewhat from end of last year while pricing of second largest input cost, electricity, is fixed at a high price. The company´s previous electricity contract ended 31.12.2022, and a new contract was concluded for period 1.1.2023 to 30.6.2024, at a higher price than the old contract (see further notes in Financial Risks section below).

The company had a longer maintenance period at start of year 2023, from mid-December 2022 to 19th February 2023. Production was restarted only on 20th February. With no output during this period, while having to carry the normal costing during the maintenance period, the company expect 2023 Q1 financial results to be poor. That being said, the building materials market tend to be more active during the Spring months (ie Q2) and at this stage it does look like this will be case also this year.

REAL ESTATE MANAGEMENT

The company will continue to manage and develop the property on Suur-Jõe Street 48, Pärnu. A detail plan for the property is ongoing (expected to be approved this Spring), with the intention of converting the property into a private residential property.

FINANCIAL HIGHLIGHTS

€ thousand

Income statement	Q4 2022	Q4 2021	12M 2022	12M 2021
Revenue	2,031	2,339	11,074	10,096
EBITDA	661	215	1,732	1,557
EBITDA margin	33%	9%	16%	15%
Operating profit/-loss	536	97	1,235	1,059
Operating margin	26%	4%	11%	10%
Net profit/-loss	386	(27)	1,234	1,202
Net margin	19%	(1%)	11%	12%

Statement of financial position	31.12.2022	31.12.2021
Total assets	9,408	8,063
Return on assets	13%	15%
Equity	5,084	3,850
Return on equity	24%	31%
Debt-to-equity ratio	46%	52%

Share	31.12.2022	31.12.2021
Last Price*	1.60	1.95
Earnings per share	0.27	0.27
Price-earnings ratio	5.83	7.30
Book value of a share	1.13	0.86
Market to book ratio	1.42	2.28
Market capitalization, € thousand	7,198	8,773
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/

FINANCIAL RISKS INTEREST RATE RISK

Interest rate risk is the risk that the fair value of 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 Groups loans are linked to EURIBOR, the Groups financial cost also increase when the interest rate increases. At 31.12.2022 six months' EURIBOR rate was 2,693 % and at 31.12.2021 six months' EURIBOR rate was (0.546) %. For the last six years, EURIBOR has remained negative, which means that EURIBOR has been equated to zero in loan agreemens. The loan from the Rural Development Foundation is concluded with a fixed interest rate, thus bear no interest rate risk. However, our 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.

CURRENCY 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 euro zone are nominated in EUR. The production has been sold and raw materials for production has mainly been purchased in euros.

RISK OF THE ECONOMIC ENVIRONMENT

The risk of the economic environment for the fibreboard division depends on general developments in the construction and industrial segments. The economic environment in the 2022 has been most affected by Russia`s agression against Ukraine, which has had an impact on the world economy, especially in Europe. Commodities prices have therefore been volatile, supply chains have been disturbed, and the negative impact of the sanctions imposed on Russia has been felt.

We entered into our new electricity contract, fixed for period 1.1.2023 to 30.6.2024 and the contract was signed at a time when the electricity pricing was much higher and pricing outlook was most unpredictable. The recent weeks have shown market pricing of electricity being much lower so far this year than envisaged when we signed the contract. Management is in dialogue with the electricity supplier to try to find ways to alleviate the impact of the fixed price contract.

FAIR VALUE

The management estimates that the fair values of cash, accounts payable, 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.

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.

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 fourth quarter 2022.

The management board confirms that the management report on pages 4-8 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 10-25 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.

Torfinn Losvik

Chairman of the Management Board ............................................

Pärnu, February 28, 2023

INTERIM FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF FINANCIAL POSITIONS

€ thousand	31.12.2022	31.12.2021	31.12.2020
Cash and cash equivalents	2	57	26
Receivables and prepayments (Note 2)	559	902	794
Inventories (Note 3)	1,672	390	544
Total current assets	2,233	1,349	1,364
Investment property (Note 4)	1,859	1,152	1,134
Financial assets at fair value through profit or loss (Note 7)	644	644	451
Property, plant, equipment and right-of-use assets (Note 5)	4,670	4,915	4,695
Intangible assets (Note 6)	2	3	6
Total non-current assets	7,175	6,714	6,286
TOTAL ASSETS	9,408	8,063	7,650
Borrowings (Notes 8)	290	146	756
Payables and prepayments (Notes 9)	1,014	829	1,574
Short-term provisions (Note 10)	18	19	18
Total current liabilities	1,322	994	2,348
Long-term borrowings (Notes 8)	2,875	3,074	2,493
Long-term provisions (Note 10)	127	145	161
Total non-current liabilities	3,002	3,219	2,654
Total liabilities	4,324	4,213	5,002
Share capital (at nominal value) (Note 11)	450	450	450
Statutory reserve capital	45	0	0
Retained earnings (loss)	4,589	3,400	2,198
Total equity	5,084	3,850	2,648
TOTAL LIABILITIES AND EQUITY	9,408	8,063	7,650

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

€ thousand	Q4 2022	Q4 2021	12M 2022	12M 2021
Revenue (Note 13)	2,031	2,339	11,074	10,096
Cost of goods sold (Note 14)	1,890	1,843	9,024	7,294
Gross profit	141	496	2,050	2,802
Distribution costs (Note 15)	193	277	1,112	1,168
Administrative expenses (Note 16)	109	120	424	565
Other operating income (Note 18)	697	0	730	5
Other operating expenses (Note 18)	0	2	9	15
Operating profit (loss)	536	97	1,235	1,059
Finance income (Note 19)	24	0	129	265
Finance costs (Note 19)	174	124	130	122
PROFIT (LOSS) BEFORE INCOME TAX	386	(27)	1,234	1,202
NET PROFIT (LOSS) FOR THE PERIOD	386	(27)	1,234	1,202
Basic earnings per share (Note 12)	0.09	(0.01)	0.27	0.27
Diluted earnings per share (Note 12)	0.09	(0.01)	0.27	0.27

CONSOLIDATED STATEMENT OF CASH FLOWS

€ thousand	12M 2022	12M 2021
Cash flows from operating activities
Operating profit (loss)	1,235	1,059
Adjustments:
Depreciation charge (Notes 5;6)	498	497
Profit/loss from revalution of real estate investment (Note 4)	(697)	0
Profit/loss from sale of non-current asset (Note18)	1	(2)
Change in trade and other receivables (Note 2)	343	(108)
Change in inventories (Note 3)	(1,282)	154
Change in trade and other payables (Note 9)	185	(745)
Cash generated from operations	283	855
Interest payments (Note 19)	(120)	(118)
Net other financial income and expense (Note 19)	(11)	(7)
Net cash generated from operating activities	152	730
Cash flows from investing activities
Purchase of property, plant and equipment and intangible assets (Notes 5;6)	(254)	(643)
Disposal of property, plant and equipment and intangible assets (Notes 5;6)	6	2
Purchase of real estate investment (Note 4)	(10)	(18)
Received dividends	129	0
Payout from share capital reduction	0	72
Net cash used in investing activities	(129)	(587)
Cash flows from financing activities
Loans received (Note 8)	0	1,200
Repayment of loans received (Note 8)	(102)	(1,266)
Loans received from related parties (Note 8)	0	503
Repayment of loans received from related parties (Note 8)	0	(503)
Repayment of principal element of lease liabilities (Note 8)	(46)	(46)
Change in overdraft (Note 8)	70	0
Net cash (used in)/from financing activities	(78)	(112)
NET CHANGE IN CASH	(55)	31
OPENING BALANCE OF CASH	57	26
CLOSING BALANCE OF CASH	2	57

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

€ thousand	Share capital	Statutory reserve capital	Retained earnings	Total
Balance at 31.12.2020	450	0	2,198	2,648
Net profit for 2021	0	0	1,202	1,202
Total comprehensive income for 2021	0	0	1,202	1,202
Balance at 31.12.2021	450	0	3,400	3,850
Other changes	0	45	(45)	0
Net profit for 2022	0	0	1,234	1,234
Total comprehensive income for 2022	0	0	1,234	1,234
Balance at 31.12.2022	450	45	4,589	5,084

NOTES TO THE CONSOLIDATED INTERIM REPORT

NOTE 1 ACCOUNTING POLICIES AND MEASUREMENT BASES

GENERAL INFORMATION

Nordic Fibreboard AS (the Company) (registration number: 11421437; address: Rääma 31, Pärnu), is an entity registered in the Republic of Estonia, whose activities take place in Estonia.

The Group's main activities are production and wholesale of softboard, to a minor extent, the Group also handles real estate management.

Nordic Fibreboard AS was established on 19 September 2007 in the demerger of the former Skano Group AS, currently AS Trigon Property Development, as a result of which the manufacturing units, i.e. the building materials division and furniture division were separated and transferred to subsidiaries established at the same time. The real estate management activities were added to the Group in 2019.

The Group's shares were listed in the Main List of the Nasdaq Tallinn until 2nd of April 2018, when the shares were moved from the Main List to the Secondary List. The Group`s largest shareholder is Pärnu Holdings OÜ (owning 57.63%), and its largest owners are OÜ Stetind 50% and Joakim Johan Helenius 50% by the time of compiling these financial statements.

BASIS FOR PREPARATION

The Condensed Consolidated Interim Accounts of Nordic Fibreboard AS has been prepared in accordance with the International Financial Reporting Standard (IFRS) Interim Financial Reporting as adopted by the European Union. The same accounting policies were applied for both the Interim Report and the Annual Report for the financial year that ended on 31.12.2021. The consolidated financial statements have been prepared in accordance with International Accounting Standard (IAS) 34: Interim Financial Reporting. The Condensed Interim Financial Statements do not contain all the information presented in the annual financial statements and should be read in conjunction with the Group`s latest published annual financial statements as at and for the year ended 31 December 2021.

The functional and presentation currency of Nordic Fibreboard AS is euro. All amounts disclosed in the financial statements have been rounded to the nearest thousand unless referred to otherwise.

According to the assessment of the Management Board Nordic Fibreboard AS is a going concern and the Interim Report for the 4nd quarter of 2022 gives a true and fair view of the financial position of Nordic Fibreboard AS and the results of its operations. This Condensed Consolidated Interim Report has not been audited or otherwise reviewed by auditors.

NOTE 2 TRADE AND OTHER RECEIVABLES

€ thousand	31.12.2022	31.12.2021	31.12.2020
Customer receivables	391	729	677
Prepaid taxes	150	151	92
Prepaid services	17	21	16
Other receivables	1	1	9
TOTAL	559	902	794

Impairment losses of receivables and their reversal are included in the income statement lines Other Operating income and Other Operating expenses, see also Note 18.

ANALYSIS OF TRADE RECEIVABLES BY AGING:

thousand €	31.12.2022	31.12.2021	31.12.2020
Not past due	373	678	650
incl receivables from customers who also have receivables past due	236	95	75
incl receivables from customers who have no receivables past due	137	583	575
Past due but not impaired	18	51	27
Overdue up to 90 days	16	51	20
Overdue more than 90 days	2	0	7
TOTAL	391	729	677

NOTE 3 INVENTORIES

€ thousand	31.12.2022	31.12.2021	31.12.2020
Raw materials and other materials	401	303	181
Work-in-progress	228	41	91
Finished goods	1,081	32	264
Goods in transit	0	11	0
Prepayments to suppliers	2	43	48
Write-off reserve for inventories	(40)	(40)	(41)
TOTAL	1,672	390	544

NOTE 4 INVESTMENT PROPERTY

	thousand €
Carrying amount 31.12.2020	1,134
Capitalized cost	18
Carrying amount 31.12.2021	1,152
Capitalized cost	10
Fair value revaluation	697
Carrying amount 31.12.2022	1,859

The investment properties consist of the real estate owned by Pärnu Riverside OÜ in Pärnu, Suur-Jõe Street 48 and the part of the real estate owned by Nordic Fibreboard Ltd OÜ, Rääma Street 31.

The amount of expenses related to the management of investments properties for Q4 2022 were € 18 thousand and expenses together with resold expenses were € 30 thousand in Q4 2021. Rental income from investment properties for Q4 2022 was € 11 thousand and rental income including utilities in Q4 2021 were € 36 thousand.

In 2022, a new expert appraisal was performed on the registered immovable (no 1409705) at Suur-Jõe Street 48 property using a comparison method by an the independent valuer, and on the 31.12.2022, the Suur-Jõe Street 48 investment property was recognized in the balance sheet at the new fair value. In selecting the valuating method, the valuer has assumed that the valuer is aware of the purchase and sale transactions of similar assets to be valued from competing market areas, which was a sufficient basis for using the comparison method.

FAIR VALUE OF INVESTMENT PROPERTY BY OBJECTS:

	thousand €
31.12.2020
Share of registered immovable property at Suur-Jõe 48, Pärnu	959
Share of registered immovable property at Rääma Street 31, Pärnu	175
31.12.2021
Share of registered immovable property at Suur-Jõe 48, Pärnu	977
Share of registered immovable property at Rääma Street 31, Pärnu	175
31.12.2022
Share of registered immovable property at Suur-Jõe 48, Pärnu	1,684
Share of registered immovable property at Rääma Street 31, Pärnu	175

NOTE 5 PROPERTY PLANT EQUIPMENT AND RIGHT-OF-USE ASSETS

thousand €	Land	Buildings and facilities	Machinery and equipment	Other fixtures	Construct ion-in progress	Right-of use asset	TOTAL
Cost at 31.12.2020	191	2,541	10,747	89	31	130	13,728
Accumulated depreciation at 31.12.2020	0	(1,701)	(7,165)	(87)	0	(81)	(9,034)
Carrying amount at 31.12.2020	191	840	3,582	3	31	49	4,694
Additions	0	0	48	0	580	104	732
Reclassification	0	15	123	0	(138)	0	0
Disposals and write-offs (Note 18)	0	0	(72)	0	0	(120)	(192)
Accumulated depreciation of fixed assets written off	0	0	72	0	0	100	172
Depreciation (Notes 14;16)	0	(78)	(365)	(1)	0	(47)	(491)
Cost at 31.12.2021	191	2,556	10,845	89	473	114	14,268
Accumulated depreciation at 31.12.2021	0	(1,779)	(7,459)	(88)	0	(28)	(9,353)
Carrying amount at 31.12.2021	191	777	3,387	1	473	86	4,915
Additions	0	4	44	0	187	44	279
Reclassification	0	0	265	0	(255)	(10)	0
Accumulated depreciation of reclassified fixed assets	0	0	(10)	0	0	10	0
Disposals and write-offs (Note 18)	(7)	0	(124)	0	0	(29)	(160)
Accumulated depreciation of fixed assets written off	0	0	124	0	0	9	133
Depreciation (Notes 14;16)	0	(78)	(371)	0	0	(48)	(497)
Cost at 31.12.2022	184	2,560	11,030	89	405	119	14,387
Accumulated depreciation at 31.12.2022	0	(1,857)	(7,716)	(88)	0	(57)	(9,717)
Carrying amount at 31.12.2022	184	703	3,314	1	405	62	4,670

NOTE 6 INTANGIBLE ASSETS

thousand €	Computer software
Cost at 31.12.2020	77
Accumulated amortisation at 31.12.2020	(71)
Carrying amount 31.12.2020	6
Additions 2021	2
Disposals and write-offs (Note 18)	(66)
Accumulated depreciation of fixed assets written off	66
Amortisation charge (Notes 14;16)	(5)
Cost at 31.12.2021	13
Accumulated amortisation at 31.12.2021	(10)
Carrying amount 31.12.2021	3
Amortisation charge (Notes 14;16)	(1)
Cost at 31.12.2022	13
Accumulated amortisation at 31.12.2022	(11)
Carrying amount 31.12.2022	2

NOTE 7 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

thousand €	31.12.2022	Change 12M 2021	31.12.2021	31.12.2020
Non-current assets
Listed securities - Equity securities - cost at	338	0	338	410
Revaluation	306	0	306	40
Fair value as at	644	0	644	451

Financial assets at fair value through profit or loss (Trigon Property Development AS shares) have been revaluated to reflect fair value based on last price at 31.2.2022, 31.12.2021 and 31.12.2020 as shown on Nasdaq Tallinn Stock Exchange.

NOTE 8 BORROWINGS

In the second quarter of 2021, Nordic Fibreboard AS and its subsidiary Nordic Fibreboard Ltd entered into loan agreements with Coop Bank for the full refinancing of Swedbank AS Group loan. The loan provided by Coop Bank AS has a duration of 5 years with 10 year amortisation schedule, the interest rate was initially 6M EURIBOR + 4.5% margin per annum, in March 2022 Coop Pank AS lowered the margin to 3.5% per annum. There is also a one-year overdraft agreement with Coop Bank AS entered into in the second quarter of 2022 with a limit of € 200 thousand. The interest rate on the overdraft is 6M EURIBOR + 3.5% margin per annum.

In Q4 2022, repayments of lease obligations in the amount of € 11 thousand were made and during the 12M 2022 € 46 thousand.

INFORMATION REGARDING BORROWINGS AS AT:

thousand €	Interest rate	31.12.2022	31.12.2021	31.12.2020
Current borrowings
Current portion of long-term loan (Swedbank)	6 month EURIBOR+5%	0	0	717
Current portion of long-term loan (Coop Bank)	6 month EURIBOR+3.5%	106	100	0
Current portion of long-term loan (RDF)	Until 30.12.2022 2%, later 4%	83	0	0
Current portion of long-term lease liabilities	6 month EURIBOR+2.49%	31	46	39
Bank overdrafts (Coop Pank)	3.5%	70	0	0
Total		290	146	756
Non-current borrowings
Non-current portion of long-term loan (Swedbank)	6 month EURIBOR+5%	0	0	483
Non-current portion of long-term loan (Coop Pank)	6 month EURIBOR+3.5%	926	1,034	0
Non-current portion of long-term loan (RDF)	Until 30.12.2022 2%, later 4%	1,917	2,000	2,000
Non-current portion of long-term lease liabilities	6 month EURIBOR+2.49%	32	40	10
Total		2,875	3,074	2,493
Total borrowings		3,165	3,221	3,249

CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES IN 2022

Changes in liabilities arising from financing activities thousand €	31.12.2021	Cash flows	Non monetary settlements	Interest accrued	Interest paid	Reclassi fication	31.12.2022
Current portion of long-term loan (Coop Bank)	100	(102)	0	81	(81)	108	106
Current portion of long-term loan (RDF)	0	0	0	0	0	83	83
Current portion of long-term lease liabilities	46	(46)	0	1	(1)	31	31
Bank overdrafts (Coop Pank)	0	70	0	2	(2)	0	70
Non-current portion of long term loan (Coop Pank)	1,034	0	0	0	0	(108)	926
Non-current portion of long term loan (RDF)	2,000	0	0	37	(37)	(83)	1,917
Non-current portion of long term lease liabilities	40	0	23	0	0	(31)	32
Total liabilities from financing activities	3,220	(78)	23	120	(120)	0	3,165

Changes in liabilities arising from financing activities thousand €	31.12.2020	Cash flows	Non monetary settlements	Interest accrued	Interest paid	Reclassi fication	31.12.2021
Current portion of long-term loan (Swedbank)	717	(717)	0	26	(26)	0	0
Current portion of long-term loan (Coop Bank)	0	(66)	0	49	(49)	166	100
Current portion of long-term lease liabilities	39	(46)	(12)	2	(2)	65	46
Bank overdrafts (Coop Pank)	0	0	0	1	(1)	0	0
Non-current portion of long term loan (Swedbank)	483	(483)	0	0	0	0	0
Non-current portion of long term loan (Coop Pank)	0	1,200	0	0	0	(166)	1,034
Non-current portion of long term loan (MES)	2,000	0	0	40	(40)	0	2,000
Non-current portion of long term lease liabilities	10	0	95	0	0	(65)	40
Total liabilities from financing activities	3,249	(112)	83	118	(118)	0	3,220

CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES IN 2021

NOTE 9 TRADE AND OTHER PAYABLES

thousand €	31.12.2022	31.12.2021	31.12.2020
Trade payables	471	367	1,110
Payables to employees	145	149	138
incl. accrued holiday pay reserve	50	46	33
Tax liabilities	133	137	128
incl. social security and unemployment insurance	83	87	82
personal income tax	40	40	35
contribution to mandatory funded pension	2	2	3
other taxes	8	8	8
Prepayments received	246	152	162
Other payables	19	24	36
TOTAL	1,014	829	1,574

NOTE 10 PROVISIONS

Provisions are made in relation to the compensations for loss of working capacity of former employees after work accidents. The total amount of the provision has been estimated considering the number of persons receiving the compensation, extent of their disability, their former level of salary, level of pension payments and estimations of the remaining period of payments.

thousand €
Balance at 31.12.2020	179
incl. current portion of provision	18
incl. non-current portion of provision	161
Movements 2021:
Use of provision	(25)
Interest cost (Note 19)	7
Increase of reserve	3
Balance at 31.12.2021	164
incl. current portion of provision	19
incl. non-current portion of provision	145
Movements 2022:
Use of provision	(25)
Interest cost (Note 19)	6
Balance at 31.12.2022	145
incl. current portion of provision	18
incl. non-current portion of provision	127

NOTE 11 EQUITY

	Nominal value	Number of shares	Share capital
	€	pcs	thousand €
Balance at 31.12.2022	0.10	4,499,061	450
Balance at 31.12.2021	0.10	4,499,061	450
Balance at 31.12.2010	0.10	4,499,061	450

As of 31.12.2022 the share capital of Nordic Fibreboard AS totalled 449,906.10 euros which consisted of 4,449,061 no par value registered shares with a book value of 0.10 euros per share. Each ordinary share grants its owner one vote in the General Meeting of Shareholders and the right to receive dividends. The minimum share capital outlined in the Articles of Association is 250,000 euros and the maximum share capital is 1,000,000 euros.

As at 31.12.2022 the Group had 1,130 shareholders of which with more than 5% ownership interest were:

Shareholder	Number of shares (pcs)	Ownership interest (%)
Pärnu Holdings OÜ	2,592,775	57.63
OÜ Kõik või Mittemidagi	617,291	13.72

As at 31.12.2021 the Group had 875 shareholders of which with more than 5% ownership interest were:

Shareholder	Number of shares (pcs)	Ownership interest (%)
Pärnu Holdings OÜ	2,592,775	57.63
Gamma Holding Investment OÜ	605,300	13,45

The number of Nordic Fibreboard AS shares owned by the members of the Management Board and Supervisory Board of Nordic Fibreboard AS was as follows:

• Joakim Johan Helenius 20,000 shares (31.12.2021: 20,000 shares)
• Trond Brekke 0 shares (31.12.2021: 0 shares)
• Sakari Wallin 0 shares (31.12.2021: 0 shares)
• Torfinn Losvik 0 shares (31.12.2021: 0 shares)

Both Joakim Johan Helenius and Torfinn Losvik have indirect ownership through parent company Pärnu Holdings OÜ. In addition Torfinn Losvik owns shares in Nordic Fibreboard AS directly through Stetind OÜ in the amount of 44,206 shares (2021: 44,206 shares).

NOTE 12 EARNINGS PER SHARE

Basic earnings per share have been calculated by dividing the profit attributable to equity holders of the Parent Company by the weighted average number of shares outstanding during the period. Diluted earnings (loss) per share is calculated based on the net profit (loss) and the number of shares.

Diluted earnings per share have been calculated by dividing the profit attributable to equity holders of the Parent Company by the weighted average number of shares outstanding during the period, taking into account the number of shares potentially issued. As the Group has no option programs valid from 31.12.2020, the Group does not own any potential shares.

	31.12.2022	31.12.2021	31.12.2020
Net profit (-loss) (in thousands of euros)	1,234	1,202	1,074
Weighted average number of shares (th pc)	4,499	4,499	4,499
Basic earnings per share (in euros)	0.27	0.27	0.24
Weighted average number of shares used for calculating the diluted earnings per shares (th pc)	4,499	4,499	4,499
Diluted earnings per share (in euros)	0.27	0.27	0.24
Book value of share (in euros)	1.13	0.86	0.59
Price/earnings ratio (P/E)	5.83	7.30	1.72
Last price of the share of Nordic Fibreboard AS on Tallinn Stock Exchange at 31.12.2022, 31.12.2021 and 31.12.2020 (in euros)	1.60	1.95	0.41

The share of Nordic Fibreboard AS has been listed on Tallinn Stock Exchange starting from 25.09.2007.

NOTE 13 SEGMENTS

Operating segments have been determined based on the reports reviewed by the Management Board that are used to make strategic decision. The Management Board considers the current business based on the types of products and services as follows:

• Fibreboard manufacturing and sale (Nordic Fibreboard Ltd OÜ and Suomen Tuulileijona Oy) manufacture general construction boards based on soft wood fibre boards and interior finishing boards in the Pärnu factory and wholesale of those boards.
• Real Estate Management (Pärnu Riverside Development OÜ) real estate management and development on Suur-Jõe 48, Pärnu.

In 2022, the furniture retail sales in Estonia (Skano Furniture OÜ) has not treated separately since the said subsidiary ceased active operations in the first quarter of 2020, so this segment is no longer important. Skano Furniture OÜ was liquidated after the balance sheet date of 31.12.2022 on 18.01.2023.

The Management Board assesses the performance of operating segments based on operating profit and EBITDA as a primary measure. As a secondary measure, the Management Board also reviews net revenue.

All amounts provided to the Management Board are measured in a manner consistent with that of the financial statements. Inter-segment sales are carried out at arm's length.

BUSINESS SEGMENTS:

12 months 2022 thousand €	Fibreboard manufacturing and wholesale	Real Estate Management	Group's general expenses and eliminations	SEGMENTS TOTAL
Revenue from external customers	11,035	39	0	11,074
Operating profit/-loss	595	672	(32)	1,235
Amortisation/ depreciation (Notes 5; 6)	497	0	0	497
Segment assets	7,934	1,688	(214)	9,408
Non-current assets of the segment (Notes 4; 5; 6; 7)	5,491	1,684	0	7,175
Segment liabilities	4,175	36	113	4,324
Additions to non-current assets (Notes 5;6)	279	10	0	289
Interest expenses (Note 19)	121	0	4	126

12 months 2021 thousand €	Fibreboard manufacturing and wholesale	Real Estate Manage ment	Group's general expenses and eliminations	SEGMENTS TOTAL
Revenue from external customers	9,842	254	0	10,096
Operating profit/-loss	1,057	15	(13)	1,059
Amortisation/ depreciation (Notes 5; 6)	496	0	1	497
Segment assets	7,209	994	(140)	8,063
Non-current assets of the segment (Notes 4; 5; 6; 7)	5,736	977	1	6,714
Segment liabilities	4,049	14	150	4,213
Additions to non-current assets (Notes 5;6)	734	18	0	752
Interest expenses (Note 19)	117	0	5	122

BUSINESS SEGMENT BY THE GEOGRAPHICAL LOCATION OF CUSTOMERS:

thousand €	12M 2022		12M 2021
	Fibreboard manufacturing and wholesale	Real Estate Manage ment	SEGMENTS TOTAL	Fibreboard manufacturing and wholesale	Real Estate Manage ment	SEGMENTS TOTAL
European Union	10,297	39	10,336	8,225	254	8,478
Russia	427	0	427	1,356	0	1,356
Middle East	154	0	154	13	0	13
Asia	69	0	69	147	0	147
Africa	0	0	0	46	0	46
Other	88	0	88	55	0	55
TOTAL	11,035	39	11,074	9,842	254	10,096

NOTE 14 COST OF GOODS SOLD

thousand €	Q4 2022	Q4 2021	12M 2022	12M 2021
Raw materials and main materials	1,132	608	4,056	2,483
Electricity, heat and water	1,049	590	3,870	2,329
Labour expenses (Note 17)	414	387	1,621	1,532
Depreciation (Note 5; 6)	125	118	497	497
Change in balances of finished goods and work in progress	(877)	75	(1,225)	269
Other expenses	47	65	205	184
TOTAL	1,890	1,843	9,024	7,294

NOTE 15 DISTRIBUTION COSTS

thousand €	Q4 2022	Q4 2021	12M 2022	12M 2021
Transportation expenses	122	181	831	837
Labour expenses (Note 17)	48	68	186	199
Marketing expense	1	1	1	1
Commission fees	19	24	77	107
Other expenses	3	3	17	24
TOTAL	193	277	1,112	1,168

NOTE 16 ADMINISTRATIVE AND GENERAL EXPENSES

thousand €	Q4 2022	Q4 2021	12M 2022	12M 2021
Labour expenses (Note 17)	53	60	226	220
Purchased services	21	31	80	266
Office supplies	16	5	51	13
Depreciation (Note 5; 6)	0	0	0	1
Other expenses	19	24	67	65
TOTAL	109	120	424	565

NOTE 17 LABOUR EXPENSES

thousand €	Q4 2022	Q4 2021	12M 2022	12M 2021
Wages and salaries	389	392	1,537	1,478
Social security and unemployment insurance	126	123	496	473
Fringe benefits paid to employees	4	8	12	19
TOTAL	519	523	2,045	1,970

NOTE 18 OTHER OPERATING INCOME AND EXPENSES

OTHER OPERATING INCOME

thousand €	Q4 2022	Q4 2021	12M 2022	12M 2021
Compensation from insurance	0	0	33	0
Profit from sale of fixed assets	0	0	0	2
Profit from revaluation of real estate investments (Note 4)	697	0	697	0
Other operating income	0	0	0	3
TOTAL	697	0	730	5

OTHER OPERATING EXPENSES

thousand €	Q4 2022	Q4 2021	12M 2022	12M 2021
Reclamations	0	0	3	1
Commission	0	0	1	8
Membership fees	0	0	1	1
Penalties paid	0	2	3	5
Loss from sales of fixed assets	0	0	1	0
TOTAL	0	2	9	15

NOTE 19 FINANCIAL INCOME AND EXPENSES

thousand €	Q4 2022	Q4 2021	12M 2022	12M 2021
Financial income:
Revaluation of TPD shares	0	0	0	265
Received dividends	24	0	129	0
TOTAL	24	0	129	265
thousand €
Financial cost:
Interest expenses	31	35	126	122
including interest expenses related to provisions (Note 10)	2	2	6	7
Revaluation of TPD shares	143	89	0	0
Other finance cost	0	0	4	0
TOTAL	174	124	130	122

NOTE 20 RELATED PARTIES

The following parties are considered to be related parties:

• Parent company Pärnu Holdings OÜ and owners of the parent company;
• Other entities in the same consolidation group;
• Members of the Management, the Management Board and the Supervisory Board of Nordic Fibreboard AS and their close relatives;
• Entities under the control of the members of the Management Board and Supervisory Board;

• Individuals with significant ownership unless these individuals lack the opportunity to exert significant influence over the business decisions of the Group.

As of 31 December 2022 and 31 December 2021, the largest shareholder of Pärnu Holdings OÜ and the entities with significant influence over the Group are: Joakim Johan Helenius (50%) and Stetind OÜ (50%). The owner of Stetind OÜ is Torfinn Losvik.

BENEFITS (INCL. TAX EXPENSES) TO THE MEMBERS OF THE MANAGEMENT ALL CONSOLIDATION GROUP ENTITIES:

thousand €	Q4 2022	Q4 2021	12M 2022	12M 2021
Membership fees	53	59	200	184
Social tax	17	20	67	61
Total	70	79	267	245

Benefits (incl. tax expenses) include payments of parent and subsidiary company Management Board and Supervisory Board fees paid within the period. The member of the Management Board of Nordic Fibreboard AS will receive severance pay to three months' remuneration according to the contract. No payments were made to members of Supervisory Board.

SALES AND PURCHASES FROM RELATED PARTIES:

Nordic Fibreboard AS has purchased mainly consultation services from related parties. Transactions with related parties are based on market terms.

thousand €	Q4 2022	Q4 2021	12M 2022	12M 2021
Purchased services	5	5	17	17
Total	5	5	17	17

BALANCES WITH RELATED PARTIES AS OF:

thousand €	31.12.2022	31.12.2021
Purchased services	1	1
Total	1	1