Nordic Fibreboard

Interim / Quarterly Report • Aug 26, 2022

Second quarter Interim Report 2022

NORDIC FIBREBOARD AS

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

1.04.2022
30.06.2022
1.01.2022
31.12.2022
Nordic Fibreboard AS
11421437
Rääma 31, Pärnu 80044, Estonia
+372 44 78 323
group@nordicfibreboard.com
www.nordicfibreboard.com
AS PricewaterhouseCoopers
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 AND RIGHT OF USE ASSETS 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 20
NOTE 13 SEGMENTS 20
NOTE 14 COST OF GOODS SOLD 22
NOTE 15 DISTRIBUTION COSTS 22
NOTE 16 ADMINISTRATIVE AND GENERAL EXPENSES 22
NOTE 17 LABOUR EXPENSES 23
NOTE 18 OTHER OPERATING INCOME AND EXPENSES 23
NOTE 19 FINANCIAL INCOME AND EXPENSES 23
NOTE 20 RELATED PARTIES 23

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 (this subsidiary has had no activities for the last couple of years and is now undergoing a liquidation process). Nordic Fibreboard Ltd OÜ owned a subsidiary Suomen Tuulileijona OY, which was liquidated on 06.06.2022. The Group, as of 30.06.2022, 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 (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).

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 30.06.2022 the Group employed 91 people (30.06.2021: 93 employees).

MANAGEMENT REPORT

NORDIC FIBREBOARD AS UNAUDITED RESULTS FOR SECOND QUARTER OF 2022

Consolidated net sales for Q2 2022 were € 3.65 million (Q2 2021: € 2.58 million). The main business area is the production and wholesale of fibreboard, which recorded sales in Q2 2022 of € 3.64 million, an increase of 45% compared to Q2 2021. The remaining business area is real estate management of the property owned in Suur-Jõe street in Pärnu, who recorded sales of € 9 thousand in Q2 2022 (Q2 2021: 64 thousand).

The reason for the increase in sales revenue in Q2 2022 was the continuing strong demand for building materials in the construction sector and a higher production volume compared to the Q2 2021. Production was running at full capacity and delivery times to our key customers was on average 3 months, which has been the norm during the last 2 years. Real estate management lost its largest tenant end of last year, which thus resulted in less sales in Q2 2022 compared to Q2 2021.

The consolidated EBITDA of Nordic Fibreboard for Q2 2021 was € 624 thousand, the EBITDA margin was 17% (Q2 2021: EBITDA was € 502 thousand and the EBITDA margin was 19%). Compared to the Q2 2021 the Group`s gross margin decreased from 37% to 30% in the Q2 2022. The main reason for this reduction in profitability is due to the sharp increase in raw material costs, ie woodchips and energy, experienced during 2022.

In the Q2 2022, a total financial income of € 82 thousand was recorded, consisting of financial income of € 105 thousand from dividend from the shares of Trigon Property Development (TPD), € 12 thousand from profits from the revaluation of these shares, and financial costs of € 35 thousand. In the Q2 2021, the financial income of € 227 thousand consisted of profit from the revaluation of TPD shares of € 257 thousand, and financial costs of € 30 thousand.

Group`s consolidated net profit for Q2 2022 was € 580 thousand (Q2 2021: profit € 606 thousand).

DIVISIONAL REVIEW

REVENUE BY BUSINESS SEGMENTS

€ thousand	Q2 2022	Q2 2021	6M 2022	6M 2021
Fibreboards production and sales	3,643	2,513	6,234	5,269
Real Estate Management	9	64	18	153
TOTAL	3,652	2,576	6,252	5,422

PROFIT BY BUSINESS SEGMENTS

€ thousand	Q2 2022	Q2 2021	6M 2022	6M 2021
EBITDA by business units:
Fibreboards production and sales	635	497	914	993
Real Estate Management	(3)	(9)	(12)	(1)
Group transactions	(8)	14	(23)	(6)
TOTAL EBITDA	624	502	879	986
Depreciation	(126)	(123)	(248)	(256)
TOTAL OPERATING PROFIT/ LOSS	498	379	631	730
Net financial income	82	227	100	427
NET PROFIT/ LOSS	580	606	731	1,157

NORDIC FIBREBOARD LTD: FIBREBOARD PRODUCTION AND SALES

Fibreboard sales in Q2 2022 were € 3.64 million (2021: € 2.51 million). The order backlog remained strong throughout Q2 2022 reflecting the strong local markets, however we are keeping in close touch

with existing customers in far away markets, which resulted in some sales to Asia and Middle East. During Q2 2022, we increased the prices of our products to compensate for the increase in raw materials prices and energy costs.

The biggest increase in sales growth in Q2 2022 came from strong sales and volume growth in our three largest markets, these being Finland, Denmark, and Estonia. Sales to Russia ended in May 2022 due to the sanctions imposed as a result of Russia's war on Ukraine.

The operating profitability, ie EBITDA, of the fibreboard activities in Q2 2022 was € 635 thousand, an increase of 22% compared to the same period last year. Fibreboard division's net profit for Q2 2022 was € 592 thousand (Q2 2021: net profit € 603 thousand).

	€ thousand		€ thousand
	Q2 2022	Q2 2021	6M 2022	6M 2021
European Union	3,444	2,094	5,702	4,253
Russia	158	381	427	814
Asia	28	22	70	124
Middle East	13	0	26	0
Africa	0	0	0	46
Other	0	16	9	32
TOTAL	3,643	2,513	6,234	5,269

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 € 9 thousand in Q2 2022, (Q2 2021: € 64 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 Q2 2022 were negative € 3 thousand and net loss € 3 thousand (Q2 2021: EBITDA negative € 9 thousand and net loss € 9 thousand).

STATEMENT OF FINANCIAL POSITION AND CASH FLOW STATEMENT

As of 30.06.2022 the total assets of Nordic Fibreboard AS were € 9.1 million (30.06.2021: € 8.1 million). The liabilities of the company as of 30.06.2022 were € 4.5 million (30.06.2021: € 4.3 million), of which Group has payables amounting to € 0.8 million as at 30.06.2022 (30.06.2021: € 0.5 million) and borrowings of € 3.2 million as at 30.06.2022 (30.06.2021: also € 3.2 million).

Receivables and prepayments amounted to € 1.6 million as at 30.06.2022 (30.06.2021: € 1.0 million). Inventories were € 0.6 million as of 30.06.2022 (30.06.2021: € 0.5 million). Fixed assets were € 6.7 million as of 30.06.2022 (€ 6.6 million as of 30.06.2021).

During 6M 2022, the Group's cash flows from operating activities totalled cash inflow of € 269 thousand (6M 2021: cash inflow € 110 thousand). Cash outflows due to investment activities was € 39 thousand during 6M 2022, consisting of investments into production assets of € 144 thousand and dividend received from TPD shares of € 105 thousand (6M 2021: cash outflow € 58 thousand). Cash outflows due to financing activities was € 74 thousand during 6M 2022, consisting of loans repaid of € 50 thousand and finance lease payments of € 24 (6M 2022: cash outflow € 40 thousand). Net cash effect during 6M 2022 showed cash inflows of € 156 thousand (6M 2021: cash inflows € 12 thousand).

PEOPLE

On the 30th of June 2022, the Group employed 91 people (compared to 93 people as of 30.06.2021). The average number of personnel in Q2 2022 was 92 (Q2 2021: 93 people).

Labour costs were € 0.53 million including taxes in Q2 2022 and € 1.0 million for first six months of 2022 (Q2 2021: € 0.50 million, 6M 2021: € 1.0 million). Group fees for the members of the management boards of holding company and its subsidiaries, together with taxes, were € 66 thousand in Q2 2022 and € 132 thousand for first six months of 2022 (Q2 2021: € 55 thousand, 6M 2021: € 110 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

Demand for fibreboards was strong during Q2 2022 and the outlook near term indicate that demand is still good despite the current market uncertainty driven by higher energy costs and an increased interest rate environment. Our relatively inexpensive fibreboards, with its green credentials, should provide a somewhat good hedge against any future softening of the building material markets. Nordic Fibreboard's extensive customer reach on several continents is also a comforting factor when looking ahead.

The management is in process of securing financing for a new biomass boiler, the objective being to improve the boiler houses energy and resource use , which would improve the efficiency of using wood fuel and reduce air emissions. The goal of Nordic Fibreboards is to improve the company`s current energy use so that it can operate more efficiently and environmentally friendly in the future.

PÄRNU RIVERSIDE DEVELOPMENT

We will continue to manage and develop the property on Suur-Jõe Street 48, Pärnu. A detail plan for the property is ongoing, with the intention of converting the property into a private residential property.

FINANCIAL HIGHLIGHTS

Income statement	Q2 2022	Q2 2021	6M 2022	6M 2021
Revenue	3,652	2,576	6,252	5,422
EBITDA	624	502	879	986
EBITDA margin	17%	19%	14%	18%
Operating profit	498	379	631	730
Operating margin	14%	15%	10%	13%
Net profit	580	606	731	1 157
Net margin	16%	24%	12%	21%
Statement of financial position	30.06.2022	31.12.2021	30.06.2021	31.12.2020
Total assets	9,100	8,063	8,140	7,650
Return on assets	8%	15%	14%	14%
Equity	4,582	3,850	3,805	2,648
Return on equity	16%	31%	30%	41%
Debt-to-equity ratio	50%	52%	53%	65%
Share	30.06.2022	31.12.2021	30.06.2021	31.12.2020
Last Price*	1.66	1.95	1.74	0.45
Earnings per share	0.17	0.27	0.57	0.24
Price-earnings ratio	9.61	7.30	3.05	1.89
Book value of a share	1.02	0.86	0.85	0.59
Market to book ratio	1.63	2.28	2.06	0.76
Market capitalization, € thousand	7,468	8,773	7,828	2,025
Number of shares, piece	4,499,061	4,499,061	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 30.06.2022 six months' EURIBOR rate was 0,263% and at 30.06.2021 (0.515)%. For the last six years, EURIBOR has remained negative, which means that EURIBOR has been equated to zero in loan agreemens. Since the interest rate increase is currently marginal and the Group borrowings have a term of up to 5 years, the management estimates that the floating interest rate will not have a significant impact on the 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 eurozone. 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. Nordic Fibreboard has no operations outside of the euro zone and most of our export-import contracts to customers outside of the eurozone are nominated in EUR. Raw materials for production are mainly in EUR.

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 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 second 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 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, August 26, 2022

INTERIM FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF FINANCIAL POSITIONS

€ thousand	30.06.2022	31.12.2021	30.06.2021	31.12.2020
Cash and cash equivalents	213	57	38	26
Receivables and prepayments (Note 2)	1,632	902	977	794
Inventories (Note 3)	587	390	526	544
Total current assets	2,432	1,349	1,541	1,364
Investment property (Note 4)	1,152	1,152	1,136	1,134
Financial assets at fair value through profit or loss (Note 7)	708	644	933	451
Property, plant and equipment (Note 5)	4,805	4,915	4,527	4,695
Intangible assets (Note 6)	3	3	3	6
Total non-current assets	6,668	6,714	6,599	6,286
TOTAL ASSETS	9,100	8,063	8,140	7,650
Borrowings (Notes 8)	75	146	70	756
Payables and prepayments (Notes 9)	1,218	829	927	1,574
Short-term provisions (Note 10)	9	19	9	18
Total current liabilities	1,302	994	1,006	2,348
Long-term borrowings (Notes 8)	3,071	3,074	3,168	2,493
Long-term provisions (Note 10)	145	145	161	161
Total non-current liabilities	3,216	3,219	3,329	2,654
Total liabilities	4,518	4,213	4,335	5,002
Share capital (at nominal value) (Note 11)	450	450	450	450
Statutory reserve capital	45	0	0	0
Retained earnings (loss)	4,087	3,400	3,355	2,198
Total equity	4,582	3,850	3,805	2,648
TOTAL LIABILITIES AND EQUITY	9,100	8,063	8,140	7,650

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

€ thousand	Q2 2022	Q2 2021	6M 2022	6M 2021
Revenue (Note 13)	3,652	2,576	6,252	5,422
Cost of goods sold (Note 14)	2,687	1,750	4,746	3,729
Gross profit	965	826	1,506	1,693
Distribution costs (Note 15)	356	298	641	640
Administrative expenses (Note 16)	104	142	226	314
Other operating income (Note 18)	0	1	0	3
Other operating expenses (Note 18)	7	8	8	12
Operating profit (loss)	498	379	631	730
Finance income (Note 19)	117	257	169	483
Finance costs (Note 19)	35	30	69	56
PROFIT BEFORE INCOME TAX	580	606	731	1,157
NET PROFIT FOR THE PERIOD	580	606	731	1,157
Basic earnings per share (Note 12)	0.13	0.13	0.16	0.26
Diluted earnings per share (Note 12)	0.13	0.13	0.16	0.26

CONSOLIDATED STATEMENT OF CASH FLOWS

€ thousand	6M 2022	6M 2021
Cash flows from operating activities
Operating profit (loss)	631	730
Adjustments:
Depreciation charge (Notes 5;6)	248	256
Profit/loss from sale of non-current asset (Note 18)	1	0
Change in trade and other receivables (Note 2)	(730)	(182)
Change in inventories (Note 3)	(197)	18
Change in trade and other payables (Note 9)	389	(647)
Change in provisions (Note 10)	(10)	(9)
Cash generated from operations	332	166
Interest payments (Note 19)	(63)	(50)
Net other financial income and expense	0	(6)
Net cash generated from operating activities	269	110
Cash flows from investing activities
Purchase of property, plant and equipment and intangible assets (Notes 5;6)	(144)	(56)
Purchase of real estate investment (Note 4)	0	(2)
Dividends received	105	0
Net cash used in investing activities	(39)	(58)
Cash flows from financing activities
Loans received (Note 8)	0	1 200
Repayment of loans received (Note 8)	(50)	(1 218)
Loans received from related parties (Note 8)	0	503
Repayment of loans received from related parties (Note 8)	0	(503)
Finance lease payments (Note 8)	(24)	(22)
Net cash (used in)/from financing activities	(74)	(40)
NET CHANGE IN CASH	156	12
OPENING BALANCE OF CASH	57	26
CLOSING BALANCE OF CASH	213	38

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 6M 2021	0	0	1,157	1,157
Total comprehensive profit for 6M 2021	0	0	1,157	1,157
Balance at 30.06.2021	450	0	3,355	3,805
Balance at 31.12.2021	450	0	3,400	3,850
Other changes	0	45	(45)	0
Net profit for 6M 2022	0	0	731	731
Total comprehensive profit for 6M 2022	0	0	731	731
Balance at 30.06.2022	450	45	4,087	4,582

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 2nd 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	30.06.2022	31.12.2021	30.06.2021	31.12.2020
Customer receivables	1,426	729	882	677
Prepaid taxes	192	151	74	92
Prepaid services	13	22	14	17
Other receivables	1	1	7	9
TOTAL	1,632	902	977	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 €	30.06.2022	31.12.2021	30.06.2021	31.12.2020
Not past due	1,412	678	860	650
incl receivables from customers who also have receivables past due	416	95	93	75
incl receivables from customers who have no receivables past due	996	583	766	575
Past due but not impaired	14	51	23	27
Overdue up to 90 days	9	51	23	20
Overdue more than 90 days	5	0	0	7
TOTAL	1,426	729	882	677

NOTE 3 INVENTORIES

€ thousand	30.06.2022	31.12.2021	30.06.2021	31.12.2020
Raw materials and other materials	394	303	208	181
Work-in-progress	88	41	179	91
Finished goods	109	32	71	264
Goods in transit	0	11	0	0
Prepayments to suppliers	36	43	108	48
Write-off reserve for inventories	(40)	(40)	(40)	(41)
TOTAL	587	390	526	544

NOTE 4 INVESTMENT PROPERTY

	thousand €
Carrying amount 31.12.2020	1,132
Capitalized cost 6M 2021	2
Carrying amount 30.06.2021	1,136
Carrying amount 31.12.2021	1,152
Capitalized cost 6M2022	0
Carrying amount 30.06.2022	1,152

The amount of expenses related to the management of investments properties for Q2 2022 were € 12 thousand and expenses together with resold expenses were € 52 thousand in Q2 2021. Rental income from investment properties for Q2 2022 was € 9 thousand and rental income including utilities in Q2 2021 were € 64 thousand.

	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
30.06.2021
Share of registered immovable property at Suur-Jõe 48, Pärnu	961
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
30.06.2022
Share of registered immovable property at Suur-Jõe 48, Pärnu	977
Share of registered immovable property at Rääma Street 31, Pärnu	175
	15

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	23	0	31	29	83
Disposals and write-offs (Note 18)	0	0	(2)	0	0	(23)	(25)
Accumulated depreciation of fixed assets written off	0	0	2	0	0	23	25
Depreciation (Note 14)	0	(39)	(189)	(1)	0	(21)	(250)
Cost at 30.06.2021	191	2,541	10,767	89	62	136	13,786
Accumulated depreciation at 30.06.2021	0	(1,740)	(7,352)	(87)	0	(79)	(9,259)
Carrying amount at 30.06.2021	191	801	3,415	2	62	57	4,527
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	44	0	100	0	144
Reclassification	0	0	221	0	(211)	(10)	0
Reclassification of accumulated deprecation	0	0	(10)	0	0	10	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	(39)	(184)	0	0	(24)	(247)
							0
Cost at 30.06.2022	184	2,556	11,030	89	362	104	14,325
Accumulated depreciation at 30.06.2022	0	(1,818)	(7,573)	(88)	0	(42)	(9,520)
Carrying amount at 30.06.2022	184	738	3,458	1	362	62	4,805

NOTE 5 PROPERTY PLANT EQUIPMENT AND RIGHT OF USE ASSETS

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 6M 2021	3
Amortisation charge	(6)
Cost at 30.06.2021	80
Accumulated amortisation at 30.06.2021	(77)
Carrying amount 30.06.2021	3
Cost at 31.12.2021	13
Accumulated amortisation at 31.12.2021	(10)
Carrying amount 31.12.2021	3
Additions 6M 2022	0
Amortisation charge	0
Cost at 30.06.2022	13
Accumulated amortisation at 30.06.2022	(10)
Carrying amount 30.06.2022	3

NOTE 7 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

thousand €	30.06.2022	Change 6M 2022	31.12.2021	30.06.2021	31.12.2020
Non-current assets
Listed securities - Equity securities - cost as at	338	0	338	410	410
Revaluation*	370	64	306	524	40
Fair value as at	708	64	644	933	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 30.06.2022 as shown on Nasdaq Tallinn.

In Q2 2022, Nordic Fibreboard Ltd earned a profit of € 105 thousand as dividends from financial assets.

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 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 2022 with a limit of € 200 thousand. The interest rate on the overdraft is 3.5% per annum.

In Q2 2022, repayments of lease obligations in the amount of € 24 thousand were made.

Nordic Fibreboard AS Consolidated Interim Report (unaudited) Second quarter 2022

thousand €	Interest rate	30.06.2022	31.12.2021	30.06.2021	31.12.2020
Current borrowings
Current portion of long-term loan (Swedbank)	6 month EURIBOR+5%	0	0	0	717
Current portion of long-term loan (Coop Bank)	6 month EURIBOR+3.5%	53	100	48	0
Current portion of long-term lease liability	6 month EURIBOR+2.49%	22	46	22	39
Total		75	146	70	756
Non-current borrowings
Non-current loans (Swedbank)	6 month EURIBOR+5%	0	0	0	483
Non-current loans (Coop Bank)	6 month EURIBOR+3.5%	1,031	1 ,34	1,134	0
Non-current loans (RDF)	Until 30.12.22 2%, later 4%	2,000	2,000	2,000	2,000
Non-current lease liability	6 month EURIBOR+2.49%	40	40	35	10
Total		3,071	3,074	3,169	2,493
Total borrowings		3,146	3,220	3,239	3,249

CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES 6M 2022

thousand €	31.12.2021	Cash flows	Non monetary settlements	Interest accrued	Interest paid	Other	30.06.2022
Current portion of long-term loan (Coop Bank)	100	(50)	0	23	(23)	3	53
Current portion of short-term financial lease	46	(24)	0	1	(1)	0	22
Bank overdrafts (Coop Bank)	0	0	0	1	(1)	0	0
Non-current loans (Coop Bank)	1,034	0	0	0	0	(3)	1,031
Non-current loans (RDF)	2,000	0	0	38	(38)	0	2,000
Non-current lease liability	40	0	0	0	0	0	40
Total liabilities from financing activities	3,220	(74)	0	63	(63)	0	3,146

CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES 6M 2021

thousand €	31.12.2020	Cash flows	Non monetary settlements	Interest accrued	Interest paid	Other	30.06.2021
Current portion of long-term loan (Swedbank)	717	(717)	0	22	(22)	0	0
Current portion of long-term loan (Coop Bank)	0	1 182	0	7	(7)	(1,134)	48
Current portion of short-term financial lease	39	(22)	5	1	(1)	0	22
Non-current loans (Swedbank)	483	(483)	0	0	0	0	0
Non-current loans (Coop Bank)	0	0	0	0	0	1,134	1,134
Non-current loans (RDF)	2,000	0	0	20	(20)	0	2,000
Non-current lease liability	10	0	24	0	0	0	35
Total liabilities from financing activities	3,249	(40)	29	50	(50)	0	3,239

thousand €	30.06.2022	31.12.2021	30.06.2021	31.12.2020
Trade payables	797	367	510	1,110
Payables to employees	156	149	141	138
incl. accrued holiday pay reserve	46	46	32	33
Tax liabilities	149	137	132	128
incl. social security and unemployment insurance	89	87	82	82
personal income tax	43	40	37	35
contribution to mandatory funded pension	2	2	3	3
value added tax	0	0	1	0
other taxes	15	8	9	8
Prepayments received	60	152	82	162
Other payables	56	24	62	36
TOTAL	1,218	829	927	1,574

NOTE 9 PAYABLES AND PREPAYMENTS

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 6M:
Use of provision	(9)
Interest cost (Note 19)	3
Balance at 30.06.2021	170
incl. current portion of provision	9
incl. non-current portion of provision	161
Balance at 31.12.2021	164
incl. current portion of provision	19
incl. non-current portion of provision	145
Movements 2022 6M:
Use of provision	(13)
Interest cost (Note 19)	3
Balance at 30.06.2022	154
incl. current portion of provision	9
incl. non-current portion of provision	145

NOTE 11 EQUITY

	Nominal value	Number of shares	Share capital
	€	pcs	thousand €
Balance at 30.06.2022	0.10	4,499,061	450
Balance at 31.12.2021	0.10	4,499,061	450
Balance at 30.06.2021	0.10	4,499,061	450
Balance at 31.12.2020	0.10	4,499,061	450

As of 30.06.2022 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 30.06.2022 the Group had 1,182 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	597,367	13.28

As at 30.06.2021 the Group had 875 shareholders of which with more than 5% ownership interest were:

Shareholder	Number of shares (pcs)	Ownership interest (%)
Pärnu Holdings OÜ	2,645,430	58.80
Gamma Holding Investment OÜ	547,113	12.16

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 (30.06.2021: 20.000 shares)
• Trond Brekke 0 shares (30.06.2021: 0 shares)
• Sakari Wallin 0 shares (30.06.2021: 0 shares)
• Torfinn Losvik 0 shares (30.06.2021: 0 shares)

Both Joakim Johan Helenius and Torfinn Losvik have indirect ownership through parent company Pärnu Holdings OÜ. Torfinn Losvik owns shares through Stetind OÜ in the amount of 44.206 shares (2021: 44.206 shares).

NOTE 12 EARNINGS PER SHARE

Diluted earnings (loss) per share is calculated based on the net profit (loss) and the number of shares. 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.

	30.06.2022	31.12.2021	30.06.2021	31.12.2020
Net profit (in thousands of euros)	731	1,202	1,157	1,074
Weighted average number of shares (thousand units)	4,499	4,499	4,499	4,499
Basic earnings per share	0.16	0.27	0.26	0.24
Weighted average number of shares used for calculating the diluted earnings per shares (thousand units)	4,499	4,499	4,499	4,499
Diluted earnings per share	0.16	0.27	0.26	0.24
Last price of the share of Nordic Fibreboard AS on Tallinn Stock Exchange as at	1.66	1.95	1.74	0.45

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) 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) furniture retail ceased active operations in Estonia in the first quarter of 2020, this segment is no longer significant and no relevant in the 2022 Q2 interim report.

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.

6 months 2022 thousand €	Fibreboard manufacturing and wholesale	Real Estate Management	Group's general expenses and eliminations	SEGMENTS TOTAL
Revenue from external customers	6,234	18	0	6,252
Operating profit/-loss	666	(12)	(23)	631
EBITDA	914	(12)	(23)	879
Amortisation/ depreciation (Notes 5; 6)	248	0	0	248
Segment assets	8,296	983	(179)	9,100
Non-current assets of the segment (Notes 4; 5; 6; 7)	5,690	977	1	6,668
Segment liabilities	4,366	15	137	4,518
Additions to non-current assets (Notes 5;6)	144	0	0	144
Interest expenses (Note 19)	63	0	2	65

BUSINESS SEGMENTS:

Nordic Fibreboard AS Consolidated Interim Report (unaudited) Second quarter 2022

6 months 2021 thousand €	Fibreboard manufacturing and wholesale	Real Estate Management	Group's general expenses and eliminations	SEGMENTS TOTAL
Revenue from external customers	5,269	153	0	5,422
Operating profit/-loss	737	(1)	(6)	730
EBITDA	993	(1)	(6)	986
Amortisation/ depreciation (Notes 5; 6)	256	0	0	256
Segment assets	7,281	987	(128)	8,140
Non-current assets of the segment (Notes 4; 5; 6; 7)	5,637	961	1	6,599
Segment liabilities	4,159	22	154	4,335
Additions to non-current assets (Note 5; 6)	83	2	0	85
Interest expenses (Note 19)	54	0	2	56

SALES REVENUE OF BUSINESS SEGMENTS BY THE GEOGRAPHICAL LOCATION OF CUSTOMERS:

thousand €	6M 2022			6M 2021
	Fibreboard manufacturi ng and wholesale	Real Estate Manage ment	SEGMENTS TOTAL	Fibreboard manufacturi ng and wholesale	Real Estate Manage ment	SEGMENTS TOTAL
European Union	5,702	18	5,720	4,253	153	4,406
Russia	427	0	427	814	0	814
Asia	70	0	70	124	0	124
Middle East	26	0	26	0	0	0
Africa	0	0	0	46	0	46
Other	9	0	9	32	0	32
Grand Total	6,234	18	6,252	5,269	153	5,422

NOTE 14 COST OF GOODS SOLD

thousand €	Q2 2022	Q2 2021	6M 2022	6M 2021
Raw materials and main materials	1,100	673	1,851	1,322
Electricity and heat	970	536	1,804	1,140
Labour expenses (Note 17)	419	397	798	756
Depreciation (Note 5;6)	126	123	248	256
Change in balances of finished goods, goods in transit and work in progress	(14)	(63)	(113)	104
Other expenses	86	83	158	152
TOTAL	2,687	1,750	4,746	3,729

NOTE 15 DISTRIBUTION COSTS

thousand €	Q2 2022	Q2 2021	6M 2022	6M 2021
Transportation expenses	283	218	503	470
Labour expenses (Note 17)	46	44	92	87
Agency fees	22	30	34	64
Other expenses	5	6	12	19
TOTAL	356	298	641	640

NOTE 16 ADMINISTRATIVE AND GENERAL EXPENSES

thousand €	Q2 2022	Q2 2021	6M 2022	6M 2021
Labour expenses (Note 17)	65	54	120	106
Purchased services	19	79	55	181
Office supplies	10	2	23	6
Other expenses	10	7	28	21
TOTAL	104	142	226	314

NOTE 17 LABOUR EXPENSES

thousand €	Q2 2022	Q2 2021	6M 2022	6M 2021
Wages and salaries	400	374	764	718
Social security and unemployment insurance	130	120	246	231
Fringe benefits paid to employees	3	2	6	7
TOTAL	533	497	1,016	957

NOTE 18 OTHER OPERATING INCOME AND EXPENSES

OTHER OPERATING INCOME

thousand €	Q2 2022	Q2 2021	6M 2022	6M 2021
Other operating income	0	1	0	3
TOTAL	0	1	0	3
OTHER OPERATING EXPENSES
thousand €	Q2 2022	Q2 2021	6M 2022	6M 2021
Reclamations	3	0	3	1
Commission fees	1	7	1	7
Membership fees	0	0	0	1
Penalties paid	3	1	3	3
Loss from sales of fixed assets	0	0	1	0
TOTAL	7	8	8	12

NOTE 19 FINANCIAL INCOME AND EXPENSES

thousand €	Q2 2022	Q2 2021	6M 2022	6M 2021
Financial income:
Received dividends	105	0	105	0
Revaluation of TPD shares	12	257	64	483
Total financial income	117	257	169	483
Financial cost
Interest expenses	31	30	65	56
including interest expenses related to	1	2	3	3
provisions (Note 10)
Other finance cost	4	0	4	0
Total financial cost	35	30	69	56

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

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

thousand €	Q2 2022	Q2 2021	6M 2022	6M 2021
Membership fees	50	41	98	83
Social tax	16	14	33	28
Total	66	55	132	110

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 €	Q2 2022	Q2 2021	6M 2022	6M 2021
Purchased services	5	4	9	8
Total	5	4	9	8
BALANCES WITH RELATED PARTIES AS OF:
thousand €	30.06.2022	31.12.2021	30.06.2021	31.12.2020
Purchased services	3	1	2	17
Short-term loan interest	0	0	0	1