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Nordic Fibreboard

Quarterly Report May 27, 2022

2229_ir_2022-05-27_429d754c-63f4-4794-92cf-431c2d0d8bc9.pdf

Quarterly Report

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First quarter Interim report 2022

NORDIC FIBREBOARD AS

Consolidated Interim Report for the First quarter of 2022 (unaudited)

Beginning of the Interim Report Period: 1.01.2022
End of the Interim Report Period: 31.03.2022
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, Pärnu 80044, Estonia
Telephone: +372 44 78 323
E-mail: [email protected]
Homepage: www.nordicfibreboard.com
Auditor: AS PricewaterhouseCoopers
Main activity: Production and sales of fibreboards
COMPANY PROFILE 3
MANAGEMENT REPORT 4
DECLARATION OF THE MANAGEMENT BOARD 9
INTERIM FINANCIAL STATEMENTS 10
CONSOLIDATED STATEMENT OF FINANCIAL POSITIONS 10
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 11
CONSOLIDATED STATEMENT OF CASH FLOWS 12
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 13
NOTES TO THE CONSOLIDATED INTERIM REPORT 14
NOTE 1 ACCOUNTING POLICIES AND MEASUREMENT BASES 14
NOTE 2 TRADE AND OTHER RECEIVABLES 14
NOTE 3 INVENTORIES 15
NOTE 4 INVESTMENT PROPERTY 15
NOTE 5 PROPERTY PLANT EQUIPMENT 16
NOTE 6 INTANGIBLE ASSETS 17
NOTE 7 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 17
NOTE 8 BORROWINGS 17
NOTE 9 PAYABLES AND PREPAYMENTS 19
NOTE 10 PROVISIONS 19
NOTE 11 EQUITY 20
NOTE 12 EARNINGS PER SHARE 21
NOTE 13 SEGMENTS 21
NOTE 14 COST OF GOODS SOLD 23
NOTE 15 DISTRIBUTION COSTS 23
NOTE 16 ADMINISTRATIVE AND GENERAL EXPENSES 23
NOTE 17 LABOUR EXPENSES 23
NOTE 18 OTHER OPERATING INCOME AND EXPENSES 23
NOTE 19 FINANCIAL INCOME AND EXPENSES 24
NOTE 20 RELATED PARTIES 24

COMPANY PROFILE

Nordic Fibreboard AS main activity is production and sale of building materials. Nordic Fibreboard AS is a holding company with subsidiaries Nordic Fibreboard Ltd OÜ, Pärnu Riverside Development OÜ and Skano Furniture OÜ, herewith in turn Nordic Fibreboard Ltd OÜ owns a subsidiary Suomen Tuulileijona OY.

The Group, as of 31.03.2022, therefore consists of the following companies, all 100% owned:

Subsidiary Location Activity
Nordic Fibreboard Ltd OÜ Estonia Production and sales
Suomen Tuulileijona OY Finland Marketing
Pärnu Riverside Development OÜ Estonia Rental and property development
Skano Furniture OÜ Estonia Retail (operations ended)

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). Suomen Tuulileijona OY is the marketing company of Nordic's Fibreboard products in Finland.

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 31.03.2022 the Group employed 95 people (31.03.2021: 97 employees).

MANAGEMENT REPORT

NORDIC FIBREBOARD AS UNAUDITED RESULTS FOR FIRST QUARTER OF 2022

Consolidated net sales for Q1 2022 were € 2.60 million (down 8% compared to Q1 2021). The main business area is the production and wholesale of fibreboard, which recorded sales in Q1 2022 of € 2.59 million (down 6% compared to Q1 2021). 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 2022 (down from sales of € 0.08 million in Q1 2021).

Sales from production of fibreboards in Q1 2022 experienced a decline from Q1 2021 due to less volume sold as a consequence of more stoppages on the production line. Demand for our fibreboards during Q1 2022 was very strong, and production was running at full capacity. Delivery times to our key customers was on average 3 months, which has been the norm during the last 2 years. Operating profit, ie EBITDA, for Q1 2022 was € 279 thousand (ie 11% of sales), down from being € 496 thousand in Q1 2021 (ie 18% of sales). The main reason for this reduction in profitability is due to the sharp increase in raw material costs, ie woodchips and energy, experienced during Q1 2022.

Real estate management lost its largest tenant end of last year, which thus resulted in less sales in Q1 2022 compared to Q1 2021 (€ 9 thousand compared to € 89 thousand). This resulted in an operating loss of € 10 thousand in Q1 2022 (Q1 2021: € 8 thousand operating profit).

Financial income in Q1 2022 was positively affected by an increase of € 52 thousand in value of the shares owned by Nordic Fibreboard in the real estate company Trigon Property Development (TPD), listed on the stock exchange Nasdaq Tallinn. The shares were valued at € 644 thousand at start of Q1 2022, and ended up being valued at € 696 thousand at end of Q1 2022 (in Q1 2021, the shares value increased with € 255 thousand).

Group`s consolidated net profit therefore for Q1 2022 was € 152 thousand (Q1 2021: profit € 550 thousand).

DIVISIONAL REVIEW

REVENUE BY BUSINESS SEGMENTS

€ thousand Q1 2022 Q1 2021
Fibreboards production and sales 2,591 2,757
Real Estate Management 9 89
TOTAL 2,600 2,846

PROFIT BY BUSINESS SEGMENTS

€ thousand Q1 2022 Q1 2021
EBITDA by business units:
Fibreboards production and sales 279 496
Real Estate Management (10) 8
Group transactions (14) (20)
TOTAL EBITDA 255 484
Depreciation (121) (133)
TOTAL OPERATING PROFIT/ LOSS 134 351
Net financial costs 18* 199*
NET PROFIT/ LOSS 152 550

* Includes upward value adjustment from Fibreboard's shareholding in real estate development company TPD due to its share price appreciation during Q1 2022 and Q1 2021. TPD owns a business park development area in Pärnu.

NORDIC FIBREBOARD LTD: FIBREBOARD PRODUCTIONS AND SALES

Fibreboard sales for Q1 2022 were 2.59 € million. The order backlog remained strong throughout Q1 2022, which led us to prioritise our key customers in the nearby markets. EBITDA of € 279 thousand was 11% of sales in Q1 2022, down from 18% of sales in Q1 2021, such decrease being mainly due to the rapid rise during Q1 2022 in the cost of our main raw material, ie woodchips, as well as heating costs.

FIBREBOARD SALES BY GEOGRAPHICAL SEGMENTS

€ thousand Q1 2022 Q1 2021
European Union 2,259 2,159
Russia 269 433
Asia 41 102
Middle East 13 0
Other 9 16
Africa 0 47
TOTAL 2,591 2,757

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 € 9 thousand in Q1 2022, (Q1 2021: € 89 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 Q1 2022 were negative € 10 thousand (Q1 2021: positive € 8 thousand).

STATEMENT OF FINANCIAL POSITION AND CASH FLOW STATEMENT

As of 31.03.2022 the total assets of Nordic Fibreboard AS were € 8.6 million (31.03.2021: € 7.8 million). The liabilities of the company as of 31.03.2022 were € 4.6 million (31.03.2021: also € 4.6 million), of which Group has payables of € 0.8 million as at 31.03.2022 (31.03.2021: € 0.9 million) and borrowings of € 3.2 million as at 31.03.2022 (31.03.2021: also € 3.2 million).

Receivables and prepayments amounted to € 1.4 million as at 31.03.2022 (31.03.2021: € 1.0 million). Inventories were € 0.4 million as of 31.03.2022 (31.03.2021: € 0.3 million). Fixed assets were € 6.7 million as of 31.03.2022 (€ 6.4 million as of 31.03.2021).

During 2022 Q1, the Group's cash flows from operating activities totalled € 78 thousand (2021 Q1: € 196 thousand). Investment activities resulted in cash outflows in amount of € 98 thousand in 2022 Q1, which was mainly due to improvements in production machinery (2021 Q1: outflow € 27 thousand). Financing activities also resulted in cash outflows of € 35 thousand in Q1 2022 (2021 Q1: cash outflow € 64 thousand). Net cash effect during 2022 Q1 cash outflow of € 55 thousand (2021 Q1: cash inflow € 105 thousand).

OUTLOOK

NORDIC FIBREBOARD LTD

Demand for fibreboards continue to be strong. The increase in our raw materials costing led us to implement price increases during Q2 2022, which should largely offset the cost increases.

Management is working on preparing the Pärnu factory's boiler house to meet the new emission requirements coming into force in 01.01.2025. Our second factory, located in Püssi, is using gas as its

main energy source and the current high gas prices is currently making it untenable to consider restarting this factory in the near future.

The ongoing war in Ukraine has resulted in us ending our sales of fibreboards to our Russian customers, and our Ukrainian customers is understandably still unable to restart their business. However, the current strong demand picture is resulting in a strong order book, thus the loss of sales to Russian and Ukrainian customers is not having any negative impact on our total sales.

PÄRNU RIVERSIDE DEVELOPMENT

We will continue to manage and develop the property on Suur-Jõe Street 48, Pärnu.

PEOPLE

On the 31.03.2022, the Group employed 95 people (compared to 97 people as of 31.03.2021). The average number of personnel in Q1 2022 was 93 (Q1 2021: 95).

For three months of 2022, wages and salaries with taxes amounted to € 484 thousand (three months 2021: € 460 thousand). Payments made to management board members of all group companies including all subsidiaries with relevant taxes were € 65 thousand in Q1 2022 and € 55 thousand in Q1 2021.

FINANCIAL HIGHLIGHTS

€ thousand
Income statement Q1 2022 Q1 2021
Revenue 2,600 2,846
EBITDA 255 484
EBITDA margin 10% 17%
Operating profit 134 351
Operating margin 5% 12%
Net profit 152 550
Net margin 6% 19%
Statement of financial position 31.03.2022 31.03.2021
Total assets 8,580 7,839
Return on assets 2% 7%
Equity 4,002 3,199
Return on equity 4% 17%
Debt-to-equity ratio 53% 59%
Share 31.03.2022 31.03.2021
Last Price (€)* 1.83 0.71
Earnings per share (€) 0.18 0.48
Price-earnings ratio 10.25 1.48
Book value of a share (€) 0.89 0.71
Market to book ratio 2.06 1.00
Market capitalization (€ thousand) 8,233 3,194
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 number of shares \*http://www.nasdaqbaltic.com/

FINANCIAL RISKS

INTEREST RATE RISK

Nordic Fibreboard AS's interest rate risk relates to changes in EURIBOR (Euro Interbank Offered Rate) since our loans are linked to EURIBOR. At 31.03.2022 six months' EURIBOR rate was (0.367)% and at 31.03.2021 (0.509)%. As EURIBOR is negative and the negative interest in the loan agreement is equal to zero, the continued negative rate of EURIBOR does not have interest expense reducing effect. As the borrowing have a maturity of up to 6 years, 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 its loans 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. However, 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 euros. 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. In resent years, the risk of a possible deterioration in the economic environment has been exacerbated by the COVID-19 pandemic. However, the economic environment in the Q1 2022 has been most affected by Russia`s agression against Ukraine, which affects not only the European but also the world economy.

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.

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 first 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 10-24 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, May 31, 2022

INTERIM FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF FINANCIAL POSITIONS

€ thousand 31.03.2022 31.12.2021 31.03.2021 31.12.2020
Cash and cash equivalents 2 57 131 26
Receivables and prepayments (Note 2) 1,401 902 975 794
Inventories (Note 3) 436 390 329 544
Total current assets 1,839 1,349 1,435 1,364
Investment property (Note 4) 1,152 1,152 1,134 1,134
Financial assets at fair value through profit or
loss (Note 7)
696 644 676 451
Property, plant and equipment (Note 5) 4,890 4,915 4,591 4,695
Intangible assets (Note 6) 3 3 3 6
Total non-current assets 6,741 6,714 6,404 6,286
TOTAL ASSETS 8,580 8,063 7,839 7,650
Borrowings (Note 8) 114 146 691 756
Payables and prepayments (Note 9) 1,234 829 1,282 1,574
Short-term provisions (Note 10) 14 19 13 18
Total current liabilities 1,362 994 1,986 2,348
Long-term borrowings (Note 8) 3,071 3,074 2,493 2,493
Long-term provisions (Note 10) 145 145 161 161
Total non-current liabilities 3,216 3,219 2,654 2,654
Total liabilities 4,578 4,213 4,640 5,002
Share capital (at nominal value) (Note 11) 450 450 450 450
Retained earnings (loss) 3,552 3,400 2,749 2,198
Total equity 4,002 3,850 3,199 2,648
TOTAL LIABILITIES AND EQUITY 8,580 8,063 7,839 7,650

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

€ thousand Q1 2022 Q1 2021
Revenue (Note 13) 2 600 2,846
Cost of goods sold (Note 14) 2 060 1,979
Gross profit 540 867
Distribution costs (Note 15) 284 342
Administrative expenses (Note 16) 121 172
Other operating income (Note 18) 0 2
Other operating expenses (Note 18) 1 4
Operating profit 134 351
Finance income (Note 19) 52 225
Finance costs (Note 19) 34 26
PROFIT BEFORE INCOME TAX 152 550
NET PROFIT FOR THE PERIOD 152 550
Basic earnings per share (Note 12) 0.03 0.12
Diluted earnings per share (Note 12) 0.03 0.12

CONSOLIDATED STATEMENT OF CASH FLOWS

€ thousand Q1 2022 Q1 2021
Cash flows from operating activities
Operating profit (loss) 134 351
Adjustments:
Depreciation charge (Notes 5; 6) 121 133
Profit from disposal of non-current asset (Note 18) 1 0
Change in trade and other receivables (Note 2) (499) (180)
Change in inventories (Note 3) (46) 215
Change in trade and other payables (Note 9) 405 (292)
Change in provisions (Note 10) (5) (5)
Cash generated from operations 111 222
Interest payments (Note 19) (33) (25)
Net other financial income and expense 0 (1)
Net cash generated from operating activities 78 196
Cash flows from investing activities
Purchase of property, plant and equipment and intangible assets (Notes 5; 6) (104) (27)
Disposal of property, plant and equipment and intangible assets (Notes 5; 6) 6 0
Net cash used in investing activities (98) (27)
Cash flows from financing activities
Repayment of loans received (Note 8) (24) (53)
Loans received from related parties (Note 8) 0 263
Repayment of loans received from related parties (Note 8) 0 (263)
Change in overdraft (Note 8) 1 0
Repayment of principal element of lease liability (Note 8) (12) (11)
Net cash (used in)/from financing activities (35) (64)
NET CHANGE IN CASH (55) 105
OPENING BALANCE OF CASH 57 26
CLOSING BALANCE OF CASH 2 131

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

€ thousand Share capital Retained earnings Total
Balance at 31.12.2020 450 2,198 2,648
Net loss for 3M 2021 0 550 550
Total comprehensive profit/loss for 3M 2021 0 550 550
Balance at 31.03.2021 450 2,749 3,199
Balance at 31.12.2021 450 3,400 3,850
Net profit/loss for 3M 2022 0 152 152
Total comprehensive profit/loss for 3M 2022 0 152 152
Balance at 31.03.2022 450 3,552 4,002

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 sale 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 (46.71% of the share capital and 49.75% of the voting shares) and Joakim Johan Helenius (46.71% of the share capital and 49.75% of the voting shares) 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 1st 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.

€ thousand 31.03.2022 31.12.2021 31.03.2021 31.12.2020
Trade receivables 1,202 729 851 677
Prepaid taxes 185 151 99 92
Prepaid services 14 22 19 17
Other receivables 0 1 6 9
TOTAL 1,401 902 975 795

NOTE 2 TRADE AND OTHER RECEIVABLES

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 € 31.03.2022 31.12.2021 31.03.2021 31.12.2020
Not past due 1,192 678 836 650
incl receivables from customers who also
have receivables past due
0 95 8 75
incl receivables from customers who have
no receivables past due
1,192 583 828 575
Past due but not impaired 10 51 15 27
Overdue up to 90 days 10 51 8 20
Overdue more than 90 days 0 0 7 7
TOTAL 1,202 729 851 677

NOTE 3 INVENTORIES

€ thousand 31.03.2022 31.12.2021 31.03.2021 31.12.2020
Raw materials and other materials 293 303 171 181
Work-in-progress 52 41 48 91
Finished goods 130 32 140 264
Goods in transit 0 11 0 0
Prepayments to suppliers 1 43 9 48
Write-off reserve for inventories (40) (40) (40) (41)
TOTAL 436 390 329 544

NOTE 4 INVESTMENT PROPERTY

thousand €
Carrying amount 31.12.2020 1,134
Carrying amount 31.03.2021 1,134
Carrying amount 31.12.2021 1,152
Carrying amount 31.03.2022 1,152

FAIR VALUE OF INVESTMENT PROPERTY BY OBJECT:

thousand €
31.12.2019
Share of registered immovable property at Suur-Jõe 48, Pärnu 951
Share of registered immovable property at Rääma Street 31, Pärnu 170
31.03.2020
Share of registered immovable property at Suur-Jõe 48, Pärnu 955
Share of registered immovable property at Rääma Street 31, Pärnu 170
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
31.03.2021
Share of registered immovable property at Suur-Jõe 48, Pärnu 959
Share of registered immovable property at Rääma Street 31, Pärnu 175
15

The amount of expenses related to the management of investments properties for Q1 2022 were € 18 thousand and expenses together with resold expenses were € 82 thousand in Q1 2021. Rental income from investment properties for O1 2022 was € 9 thousand and rental income including utilities in the Q1 2021 were € 89 thousand.

thousand € Land Buildings
and
facilities
Machinery
and
equipment
Other
fixtures
Constructi
on-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 6 0 21 0 27
Depreciation (Note 14) 0 (20) (98) (0) 0 (11) (130)
Cost at 31.03.2021 191 2,541 10,752 89 52 129 13,754
Accumulated depreciation
at 31.03.2021
0 (1,721) (7,263) (87) 0 (92) (9,163)
Carrying amount at
31.03.2021
191 820 3,489 2 52 37 4,591
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 0 36 0 68 0 104
Reclassification 0 0 211 0 (211) 0 (0)
Disposals and write-offs
(Note 18)
(7) 0 (80) 0 0 0 (87)
Accumulated depreciation
of fixed assets written off
0 0 80 0 0 0 80
Depreciation (Note 14) 0 (20) (90) (0) 0 (12) (122)
0
Cost at 31.03.2022 184 2,556 11,012 89 330 114 14,285
Accumulated depreciation
at 31.03.2022
0 (1,799) (7,468) (88) 0 (40) (9,395)
Carrying amount at
31.03.2022
184 757 3,544 1 330 74 4,890

NOTE 5 PROPERTY PLANT EQUIPMENT

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
Amortisation charge (Note 14) (3)
Cost at 31.03.2021 77
Accumulated amortisation at 31.03.2021 (74)
Carrying amount 31.03.2021 3
Cost at 31.12.2021 13
Accumulated amortisation at 31.12.2021 (10)
Carrying amount 31.12.2021 3
Amortisation charge (Note 14) (0)
Cost at 31.03.2022 13
Accumulated amortisation at 31.03.2022 (10)
Carrying amount 31.03.2022 3

NOTE 7 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

thousand € 31.03.2022 Change Q1
2022
31.12.2021 31.03.2021 31.12.2020
Non-current assets
Listed securities - Equity securities -
cost as at
338 0 338 410 410
Revaluation* 358 52 306 266 40
Fair value as at 696 52 644 676 451

*Financial assets at fair value through profit or loss (i.e. Trigon Property Development shares) have been revaluated to reflect fair value based on last price as at 31.03.2022 as shown on Nasdaq Tallinn.

NOTE 8 BORROWINGS

thousand € Interest rate 31.03.2022 31.12.2021 31.03.2021 31.12.2020
Current borrowings
Current portion of long-term loan
(Swedbank)
6 month
EURIBOR+5%
0 0 663 717
Current portion of long-term loan
(Coop Bank)
6 month
EURIBOR+3.5%
79 100 0 0
Current portion of long-term lease
liabilities
6 month
EURIBOR+2.49%
34 46 28 39
Bank overdrafts (Coop Pank) 1 0 0 0
Total 114 146 691 756
Non-current borrowings Interest rate 31.03.2022 31.12.202 31.03.2021 31.12.2020
Non-current portion of long-term
loan (Swedbank)
6 month
EURIBOR+5%
0 0 483 483
Non-current portion of long-term
loan (Coop Pank)
6 month
EURIBOR+3.5%
1,031 1,034 0 0
Non-current portion of long-term
loan (RDF)
Until 30.12.2022
2%, later 4%
2,000 2,000 2,000 2,000
Non-current portion of long-term
lease liabilities
6 month
EURIBOR+2.49%
40 40 10 10
Total 3,071 3,074 2,493 2,493
Total borrowings 3,185 3,220 3,184 3,249

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 4.5% per annum, in March 2022 Coop Pank AS lowered the loan interest rate to 3.5% per annum. There is also a one-year overdraft agreement with Coop Bank AS entered into in the second quarter of 2021 with a limit of € 200 thousand. The interest rate on the overdraft is 4% per annum.

In Q1 2022, repayments of lease obligations in the amount of € 12 thousand were made.

INFORMATION REGARDING MOVEMENT OF BORROWINGS (TABLE SHOWING CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES): Q1 2022

Changes in liabilities arising
from financing activities
thousand €
31.12.2021 Cash flows Interest
accrued
Interest
paid
Reclassific
ation
31.03.2022
Current portion of long-term
loan (Coop Bank)
100 (24) 13 (13) 3 79
Current portion of long-term
lease liabilities
46 (12) 1 (1) 0 34
Bank overdrafts (Coop Pank) 0 1 0 (0) 0 12
Non-current portion of long
term loan (Coop Pank)
1,034 0 0 0 (3) 1,031
Non-current portion of long
term loan (RDF)
2,000 0 19 (19) 0 2,000
Non-current portion of long
term lease liabilities
40 0 0 0 0 40
Total liabilities from
financing activities
3,220 (35) 33 (33) 0 3,185

INFORMATION REGARDING MOVEMENT OF BORROWINGS (TABLE SHOWING CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES): Q1 2021

Changes in liabilities arising
from financing activities
thousand €
31.12.2020 Cash flows Interest
accrued
Interest
paid
Other 31.03.2021
Current portion of long-term
loan (Swedbank)
717 (53) 15 (15) 0 663
Current portion of long-term
lease liabilities
39 (11) 0 (0) 0 28
Non-current portion of long
term loan (Swedbank)
483 0 0 0 0 483
Non-current portion of long
term loan (Coop Pank)
0 0 0 0 0 0
Non-current portion of long
term loan (RDF)
2,000 0 10 (10) 0 2,000
Non-current portion of long
term lease liabilities
10 0 0 0 0 10
Total liabilities from
financing activities
3,249 (65) 25 (25) 0 3,184

NOTE 9 PAYABLES AND PREPAYMENTS

thousand € 31.03.2022 31.12.2021 31.03.2021 31.12.2020
Trade payables 746 367 904 1,110
Payables to employees 158 149 139 138
incl. accrued holiday pay reserve 46 46 33 33
Tax liabilities 134 137 126 128
incl. social security and unemployment insurance 80 87 79 82
personal income tax 39 40 33 35
contribution to mandatory funded pension 2 2 3 3
value added tax 0 0 1 0
other taxes 13 8 10 8
Prepayments received 164 152 62 162
Other payables 31 24 51 36
TOTAL 1,234 829 1,282 1,574

NOTE 10 PROVISIONS

thousand €
Balance at 31.12.2020 179
incl. current portion of provision 18
incl. non-current portion of provision 161
Movements 2021 3M:
Use of provision (7)
Interest cost (Note 19) 2
Balance at 31.03.2021 174
incl. current portion of provision 13
incl. non-current portion of provision 161
19
Balance at 31.12.2021 164
incl. current portion of provision 19
incl. non-current portion of provision 145
Movements 2022 3M:
Use of provision (7)
Interest cost (Note 20) 1
Balance at 31.03.2022 159
incl. current portion of provision 14
incl. non-current portion of provision 145

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.

NOTE 11 EQUITY

Nominal value Number of shares Share capital
pcs thousand €
Balance at 31.03.2022 0.10 4,499,061 450
Balance at 31.12.2021 0.10 4,499,061 450
Balance at 31.03.2021 0.10 4,499,061 450
Balance at 31.12.2020 0.10 4,499,061 450

As of 31.03.2022 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 31.03.2022 the Group had 1172 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 580,000 12.89

As at 31.03.2021 the Group had 571 shareholders of which with more than 5% ownership interest were:

Shareholder Number of shares (pcs) Ownership interest (%)
Pärnu Holdings OÜ 2,682,192 59.62
Gamma Holding Investment OÜ 456,026 10.14

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 (31.03.2021: 20.000 shares)
  • Trond Brekke 0 shares (31.03.2021: 0 shares)
  • Sakari Wallin 0 shares (31.03.2021: 0 shares)
  • Torfinn Losvik 0 shares (31.03.2021: 0 shares)

Both Joakim Johan Helenius and Torfinn Losvik have indirect ownership through parent company OÜ Pärnu Holdings. Torfinn Losvik owns shares through Stetind OÜ in the amount of 44.206 shares (31.03.2021 44.206 shares).

NOTE 12 EARNINGS PER SHARE

31.03.2022 31.12.2021 31.03.2021 31.12.2020
Net profit (-loss) (in thousands of euros) 152 1,202 550 1,074
Weighted average number of shares (units) 4,499,061 4,499,061 4,499,061 4,499,061
Basic earnings per share (in euros) 0.03 0.27 0.12 0.24
Weighted average number of shares and
potential shares used for calculating the diluted
earnings per shares (units)
4,499,061 4,499,061 4,499,061 4,499,061
Diluted earnings per share 0.03 0.27 0.12 0.24
Last price of the share of Nordic Fibreboard AS
on Nasdaq Tallinn
1.83 1.95 0.71 0.45

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 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.

The share of Nordic Fibreboard AS has been listed on Nasdaq Tallinn 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 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 Street 48, Pärnu.
  • Furniture retail sale (Skano Furniture OÜ) retail sales of furniture in Estonia, ceased active operations in the first quarter of 2020, this segment is no longer significant and is not significant in Q1 2021 treated separately.

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:

Q1 2022
thousand €
Fibreboard
manufacturing
and wholesale
Real Estate
Management
Group's general
expenses and
eliminations
SEGMENTS
TOTAL
Revenue from external customers 2,591 9 0 2,600
Operating profit/-loss 157 (10) (13) 134
Amortisation/ depreciation (Notes 5; 6) 121 0 0 121
Segment assets 7,760 981 (161) 8,580
Non-current assets of the segment
(Notes 4; 5; 6; 7)
5,764 977 0 6,741
Segment liabilities 4,423 10 145 4,578
Additions to non-current assets
(Notes 5;6)
104 0 0 104
Interest expenses (Note 19) 33 0 1 34
Q1 2021
thousand €
Fibreboard
manufacturing
and wholesale
Real Estate
Management
Group's general
expenses and
eliminations
SEGMENTS
TOTAL
Revenue from external customers 2,757 89 0 2,846
Operating profit/-loss 363 8 (20) 351
Amortisation/ depreciation (Notes 5; 6) 133 0 0 133
Segment assets 6,959 1,011 (131) 7,839
Non-current assets of the segment
(Notes 4; 5; 6; 7)
5,445 959 1 6,405
Segment liabilities 4,440 39 162 4,641
Additions to non-current assets
(Notes 5; 6)
27 0 0 27
Interest expenses (Note 19) 25 0 1 26

BUSINESS SEGMENT BY THE GEOGRAPHICAL REGION OF CUSTOMERS:

thousand € 3M 2022 3M 2021
Fibreboard
manufacturing
and sale
Real Estate
Management
SEGMENTS
TOTAL
Fibreboard
manufacturing
and sale
Real Estate
Management
SEGMENTS
TOTAL
European
Union
2,259 9 2,268 2,159 89 2,249
Russia 269 0 269 433 0 433
Asia 41 0 41 102 0 102
Middle East 13 0 13 0 0 0
Africa 0 0 0 47 0 47
Other 9 0 9 16 0 16
Grand Total 2,591 9 2,600 2,757 89 2,846

NOTE 14 COST OF GOODS SOLD

thousand € Q1 2022 Q1 2021
Raw materials and main materials 684 649
Electricity, heat and water 899 633
Labour expenses (Note 17) 380 359
Depreciation (Notes 5; 6) 122 133
Change in balances of finished goods, goods in transit and
work in progress
(99) 166
Other expenses 74 39
TOTAL 2,060 1,979

NOTE 15 DISTRIBUTION COSTS

thousand € Q1 2022 Q1 2021
Transportation expenses 220 252
Labour expenses (Note 17) 46 43
Commission fees 11 34
Operating Lease 0 8
Other expenses 7 4
TOTAL 284 342

NOTE 16 ADMINISTRATIVE AND GENERAL EXPENSES

thousand € Q1 2022 Q1 2021
Labour expenses (Note 17) 55 52
Purchased services 30 102
Office supplies 13 4
Other expenses 23 13
TOTAL 121 171

NOTE 17 LABOUR EXPENSES

thousand € Q1 2022 Q1 2021
Wages and salaries 223 344
Social security and unemployment insurance 258 111
Fringe benefits paid to employees 3 5
TOTAL 484 460

NOTE 18 OTHER OPERATING INCOME AND EXPENSES

OTHER OPERATING INCOME

thousand € Q1 2022 Q1 2021
Wage subsidy 0 2
TOTAL 0 2

OTHER OPERATING EXPENSES

thousand € Q1 2022 Q1 2021
Reclamations 0 1
Loss from sales of fixed assets 1 0
Penalties paid 0 3
TOTAL 1 4

23

NOTE 19 FINANCIAL INCOME AND EXPENSES

thousand € Q1 2022 Q1 2021
Revaluation of TPD shares 52 225
Total financial income 52 225
FINANCIAL COST
thousand € Q1 2022 Q1 2021
Interest expenses 34 26
including interest expenses related to provisions (Note 10) 1 2
Total financial cost 34 26

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.

The persons with significant influence over the Group at the time of preparing this report are the biggest owners of OÜ Pärnu Holdings are OÜ: Stetind (46.71% of the share capital and 49.75% of the voting shares) and Joakim Johan Helenius (46.71% of the share capital and 49.75% of the voting shares) by the time of compiling these financial statements.

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

thousand € Q1 2022 Q1 2021
Membership fees 49 42
Social tax 16 14
Total 65 55

Benefits (incl. Tax expenses) include remuneration paid to the members of the Management Board and Supervisory Board of the parent companies and subsidiaries during 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.

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

TRANSACTIONS WITH RELATED PARTIES:

thousand € Q1 2022 Q1 2021
Purchased services 4 4
Total 4 4
BALANCES WITH RELATED PARTIES AS OF:
thousand € 31.03.2022 31.12.2021 31.03.2021 31.12.2020
Purchased services 1 1 4 17
Short-term loan interest 0 0 1 1
Total 1 1 5 17

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