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Nordic Fibreboard

Quarterly Report Nov 30, 2023

2229_ir_2023-11-30_619a1793-a367-4653-981f-6a10faf25a54.pdf

Quarterly Report

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3rd Quarter Interim Report 2023

NORDIC FIBREBOARD AS

Consolidated Interim Report for the Third Quarter of 2023 (unaudited)

Beginning of the Interim Report Period: 1.07.2023
End of the Interim Report Period: 30.09.2023
Beginning of the financial year: 1.01.2023
End of the financial year: 31.12.2023
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
CONSOLIDATED 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 21
Note 13 Segments 21
Note 14 Cost of goods sold 23
Note 15 Distribution costs 23
Note 16 Administrative and general expense 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
Note 21 Events after balance sheet date 25

3

COMPANY PROFILE

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 on 18.01.2023.

Nordic Fibreboard AS main activity is production and wholesale of building materials. In addition it owns a real estate company with one real estate project ongoing in Pärnu, Estonia.

The Group, as of 30.09.2023, therefore consists of the following companies, all 100% owned:

Subsidiary Location Activity
Nordic Fibreboard Ltd OÜ Estonia Production and sales
Pärnu Riverside Development OÜ Estonia Rental and property development

Nordic Fibreboard Ltd OÜ produces and distributes softboard products for use in many different applications, the main categories being within construction (insulation, soundproofing, and interior finishing panels for walls and ceilings) and industry (packaging, 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 30.09.2023 the Group employed 66 people (30.09.2022: 88 employees).

4

MANAGEMENT REPORT

NORDIC FIBREBOARD AS UNAUDITED RESULTS FOR THIRD QUARTER OF 2023

Consolidated net sales for Q3 2023 were € 1.79 million (Q3 2022: € 2.79 million). The main business area is Nordic Fibreboard Ltd, the production and wholesale of fibreboard, which recorded sales in Q3 2023 of € 1.78 million, (Q3 2022: € 2.78 million). The remaining business area is Pärnu Riverside Development, real estate management of the property owned in Suur-Jõe street in Pärnu, who recorded sales of € 11 thousand in Q3 2023 (Q3 2022: € 9 thousand).

The decline in Nordic Fibreboard's Q3 2023 sales revenue continues to be impacted by global economic uncertainty, which has led to a lack of confidence among end users of building materials, including the company's fiberboard. Nordic Fibreboard Ltd had sales of € 1.78 million in Q3 2023, down 12% from Q2 2023 and down 23% from Q1 2023, which shows that the decline in sales revenue is abating.

The consolidated EBITDA of Nordic Fibreboard for Q3 2023 was € 238 thousand, the EBITDA margin was 13% (Q3 2022: EBITDA was € 193 thousand and the EBITDA margin was 7%). Compared to the Q3 2022 the Groups gross margin increased from 19% to 27% in the Q3 2023, which indicates that the Groups profitability in the Q3 2023 has increased compared to the same period last year.

Financial expenses for the Q3 2023 were € 79 thousand, of which € 55 thousand were loan interest costs and € 24 thousand were losses from the revaluation of Trigon Property Development (TPD) shares. Total financial income of € 49 thousand was recorded in Q3 2022, which consist of the profit from the revaluation of shares (TPD) in the amount of € 79 thousand and the interest expense of loan obligations in the amount of € 30 thousand.

Group`s consolidated net profit for Q3 2023 was € 37 thousand (Q3 2022: profit € 117 thousand).

DIVISIONAL REVIEW

REVENUE BY BUSINESS SEGMENTS

€ thousand € thousand
Q3 2023 Q3 2022 9M 2023 9M 2022
Fibreboards production and sales 1,775 2,782 6,358 9,015
Real Estate Management 11 9 34 28
TOTAL 1,786 2,791 6,392 9,043

PROFIT BY BUSINESS SEGMENTS

€ thousand € thousand
Q3 2023 Q3 2022 9M 2023 9M 2022
EBITDA by business units:
Fibreboards production and sales 246 201 383 1,114
Real Estate Management (2) (6) (19) (18)
Group transactions (6) (2) (30) (25)
TOTAL EBITDA 238 193 334 1,071
Depreciation (122) (125) (367) (372)
TOTAL OPERATING PROFIT/ LOSS 116 68 (33) 699
Extraordinary expenses 0 0 (406) 0
Net financial income/ costs (79) 49 (128) 149
NET PROFIT/ LOSS 37 117 (567) 848

NORDIC FIBREBOARD LTD: FIBREBOARD PRODUCTION AND SALES

Fibreboard sales in Q3 2023 were € 1.78 million (Q3 2022: € 2.78 million). In Q3 2023, the main reason for the decrease in sales revenue compared to Q3 2022 was the loss of a key customer in Denmark, resulting in a loss of 30% of sales compared to Q3 2022. In addition, sales in Finland decreased by 50% in Q3 2023 compared to the same period in 2022. But as positive news, it has been possible to revive relations with former export customers and found new customers both in the Middle East and in the European Union, for example Bulgaria and France. As a result, sales to the Middle East, Asia, Africa and other regions have improved in Q3 2023 compared to Q3 2022. Sales to European Union countries have decreased in the 3rd quarter of 2023 compared to the 3rd quarter of 2022. However, if we look at the countries of the European Union separately, sales to Sweden and Latvia have increased, and sales in Estonia have remained at the same level.

The EBITDA of the fiberboard segment for the Q3 2023 was a positive € 246 thousand, which is a quarterly improvement compared to the EBITDA for the Q3 2022, which was a positive € 201 thousand, but when comparing EBITDA for the first nine months of 2023 with the 2022 with the same period, the drop is 66%. The reason for the decline was the too high fixed electricity price, which was signed with the electricity supplier at the end of 2022. The electricity contract was cancelled on 31.3.2023, and a new less onerous electricity contract came into force on 01.04.2023.

€ thousand € thousand
Q3 2023 Q3 2022 9M 2023 9M 2022
European Union 1,537 2,723 5,855 8,425
Middle East 68 47 96 73
Asia 48 0 102 69
Africa 40 0 133 0
Russia 0 0 0 427
Other 82 12 172 21
TOTAL 1,775 2,782 6,358 9,015

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 € 11 thousand in Q3 2023, (Q3 2022: € 9 thousand).

The real estate management EBITDA for Q3 2023 were negative € 2 thousand and net loss € 2 thousand (Q3 2021: EBITDA negative € 6 thousand and net loss € 6 thousand).

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AND CASH FLOW STATEMENT

As of 30.09.2023 the total assets of Nordic Fibreboard AS were € 8.9 million (30.09.2022: € 9.4 million). The liabilities of the company as of 30.09.2023 were € 4.4 million (30.09.2022: € 4.7 million), of which the Group has payables of € 0.9 million as at 30.09.2023 (30.09.2022: € 1.0 million) and borrowings of € 3.0 million as at 30.09.2023 (30.09.2022: € 3.1 million).

Receivables and prepayments amounted to € 0.8 million as at 30.09.2023 (30.09.2022: € 1.3 million). Inventories were € 1.0 million as of 30.09.2023 (30.09.2022: € 0.9 million). Fixed assets were € 7.1 million as of 30.09.2023 (€ 6.7 million as of 30.09.2022).

During 2023 9M, the Group's cash flows from operating activities totalled cash inflow of € 472 thousand (2022 9M: cash inflow € 617 thousand). Cash outflows due to investment activities was € 215 thousand during 9M 2023, consisting of investments into production assets (9M 2022: cash

5

6

outflow € 93 thousand). Cash outflows due to financing activities was € 213 thousand during 9M 2023 (9M 2023: cash outflow € 111 thousand). Net cash effect during 9M 2023 showed cash inflows of € 44 thousand, (2022 9M: cash inflows € 413 thousand).

PEOPLE

On the 30th of September 2023, the Group employed 66 people (compared to 88 people as of 30.09.2022). The average number of personnel in Q3 2023 was 66 (Q3 2022: the average number of personnel was 86).

Labour costs were € 0.39 million including taxes in Q3 2023 and € 1.24 million for first nine months of 2023 (Q3 2022: € 0.51 million, 9M 2022: € 1.53 million). Group fees for the members of the management boards of holding company and its subsidiaries, together with taxes, were € 81 thousand in Q3 2023 and € 205 thousand for first nine months of 2023 (Q3 2022: € 65 thousand, 9M 2022: € 196 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

The overall demand picture continues to be challenging, and the short-term outlook remains uncertain due to headwinds coming from macro factors, such as increasing interest rates, global economic uncertainty, and the ongoing wars in Ukraine and in Israel. All have led to a construction/renovation market slowdown and a lack of confidence among end users of building materials, including the use of the company's fibreboards.

Main operation issue remains the ongoing preparation of upgrading the company's wood-based boiler house in Pärnu so to meet the new emission requirements coming into force in 01.01.2025.

PÄRNU RIVERSIDE DEVELOPMENT

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

7

FINANCIAL HIGHLIGHTS

€ thousand
Income statement Q3 2023 Q3 2022 9M 2023 9M 2022
Revenue 1,786 2,791 6,392 9,043
EBITDA 238 193 334 1,071
EBITDA margin 13% 7% 5% 12%
Operating profit 116 68 (33) 699
Operating margin 6% 2% (1%) 8%
Net profit 37 117 (567) 848
Net margin 2% 4% (9%) 9%
Statement of financial position 30.09.2023 31.12.2022 30.09.2022 31.12.2021
Total assets 8,897 9,408 9,389 8,063
Return on assets (6%) 13% 9% 15%
Equity 4,517 5,084 4,698 3,850
Return on equity (13%) 24% 18% 31%
Debt-to-total assets ratio 49% 46% 50% 52%
Share 30.09.2023 31.12.2022 30.09.2022 31.12.2021
Last Price* 1.00 1.60 1.74 1.95
Earnings per share (0.04) 0.27 0.18 0.27
Price-earnings ratio (24.78) 5.83 9.54 7.30
Book value of a share 1.00 1.13 1.04 0.86
Market to book ratio 1.00 1.42 1.67 2.28
Market capitalization, € thousand 4,499 7,198 7,828 8,773
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-total assets ratio = Liabilities / Total assets Earnings per share = Trailing twelve months (TTM) net profit / Total shares Price-earnings ratio = Last price / Earnings per share Book value of a share = Equity / Total shares Market to book ratio = Last price / Book value of a share Market capitalization = Last price * Total shares \*http://www.nasdaqbaltic.com/

FINANCIAL RISKS

INTEREST RATE RISK

Interest rate risk is the risk that the future cash flows of financial instruments will fluctuate because of changes in market interest rates. The interest rate risk of Nordic Fibreboard AS depends on a possible change in EURIBOR (Euro Interbank Offered Rate), since some of the Groups loans are linked to EURIBOR, the Groups financial cost also increases when the interest rate increases. At 30.09.2023 six months' EURIBOR rate was 4.125% and at 30.09.2022 1.809%. The loan from the Rural Development Foundation is concluded with a fixed interest rate, thus bear no interest rate risk. However, the Company 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 Company'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, as part of the 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 purchased mainly in EUR.

RISK OF THE ECONOMIC ENVIRONMENT

The risk of the economic environment for the Group depends on general developments in the construction and industrial segments. The economic environment in the last two years has been most affected by Russia`s aggression 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 interest rates have increased. At the start of 2023, there were signs of some easing of the macroeconomic risks that the Company faced in 2022, however the ongoing uncertainty created by the war in Ukraine, and its implications and effects on the global, and especially European, economic environment make it difficult to make future economic forecasts.

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.

8

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 third quarter 2023.

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 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.

Aigar Kallas, Chairman of the Management Board Enel Äkke, Member of the Management Board Kevin Gustasson, Member of the Management Board

Pärnu, 30 November, 2023

CONSOLIDATED INTERIM FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF FINANCIAL POSITIONS

€ thousand 30.09.2023 31.12.2022 30.09.2022
Cash and cash equivalents 46 2 470
Receivables and prepayments (Note 2) 776 559 1 345
Inventories (Note 3) 971 1 672 874
Total current assets 1,793 2,233 2,689
Investment property (Note 4) 1,859 1,859 1,156
Financial assets at fair value through profit or loss (Note 7) 674 644 787
Property, plant and equipment (Note 5) 4,570 4,670 4,755
Intangible assets (Note 6) 1 2 2
Total non-current assets 7,104 7,175 6,700
TOTAL ASSETS 8,897 9,408 9,389
Borrowings (Note 8) 318 290 38
Payables and prepayments (Note 9) 1,109 1,014 1,410
Short-term provisions (Note 10) 3 18 4
Total current liabilities 1,430 1,322 1,452
Long-term borrowings (Note 8) 2,684 2,875 3,094
Long-term payables and prepayments (Note 9) 139 0 0
Long-term provisions (Note 10) 127 127 145
Total non-current liabilities 2,950 3,002 3,239
Total liabilities 4,380 4,323 4,691
Share capital (at nominal value) (Note 11) 450 450 450
Statutory reserve capital 45 45 45
Retained earnings (loss) 4,022 4,589 4,203
Total equity 4,517 5,084 4,698
TOTAL LIABILITIES AND EQUITY 8,897 9,408 9,389

For the 3rd Quarter of 2023

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

€ thousand Q3 2023 Q3 2022 9M 2023 9M 2022
Revenue (Note 13) 1,786 2,791 6,392 9,043
Cost of goods sold (Note 14) 1,433 2,387 5,497 7,134
Gross profit 353 404 895 1,909
Distribution costs (Note 15) 133 278 536 919
Administrative expenses (Note 16) 100 90 374 315
Other operating income (Note 18) 0 33 0 33
Other operating expenses (Note 18) 4 1 18 9
Operating profit (loss) 116 68 (33) 699
Extraordinary expenses 0 0 406 0
Finance income (Note 19) 0 79 74 248
Finance costs (Note 19) 79 30 202 99
Profit (loss) before income tax 37 117 (567) 848
Net profit (loss) for the period 37 117 (567) 848
Basic earnings per share (Note 12) 0.01 0.03 (0.13) 0.19
Diluted earnings per share (Note 12) 0.01 0.03 (0.13) 0.19

CONSOLIDATED STATEMENT OF CASH FLOWS

€ thousand 9M 2023 9M 2022
Cash flows from operating activities
Operating profit (loss) (33) 699
Adjustments:
Depreciation charge (Notes 5; 6) 367 372
Profit/loss from disposal of fixed assets (Note 18) 0 1
Change in trade and other receivables (Note 2) (217) (443)
Change in inventories (Note 3) 701 (484)
Change in trade and other payables (Note 9) 234 581
Change in provisions (Note 10) (15) (15)
Cash generated from operations 1,037 711
Interest payments (Notes 8; 19) (135) (91)
Net other financial income and expense (24) (3)
Extraordinary expense (406) 0
Net cash generated from operating activities 472 617
Cash flows from investing activities
Purchase of property, plant and equipment and intangible assets (Notes 5; 6) (215) (194)
Purchase of investment property (Note 4) 0 (4)
Received dividends 0 105
Net cash used in investing activities (215) (93)
Cash flows from financing activities
Repayment of loans received (Note 8) (357) (76)
Loans received from related parties (Note 8) 200 0
Finance lease payments (Note 8) (39) (35)
Change in overdraft (Note 8) (17) 0
Net cash (used in)/from financing activities (213) (111)
NET CHANGE IN CASH 44 413
OPENING BALANCE OF CASH 2 57
CLOSING BALANCE OF CASH 46 470

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

€ thousand Share capital Statutory
reserve
capital
Retained
earnings
Total
Balance at 31.12.2021 450 0 3,400 3,850
Other changes 0 45 (45) 0
Net profit/loss for 9M 2022 0 0 848 848
Total comprehensive profit/loss for 9M 2022 0 0 848 848
Balance at 30.09.2022 450 45 4,203 4,698
Balance at 31.12.2022 450 45 4,589 5,084
Net profit/loss for 9M 2023 0 0 (567) (567)
Total comprehensive profit/loss for 9M 2023 0 0 (567) (567)
Balance at 30.09.2023 450 45 4,022 4,517

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. AS of 30.09.2023 the largest shareholder of the Group is NFB Pärnu Holdings OÜ (owning 38.9%), whose owner is 100% Joakim Johan Helenius.

BASIC 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 31.12.2022. 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 2022.

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 3nd quarter of 2023 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 30.09.2023 31.12.2022 30.09.2022
Customer receivables 656 391 1,080
Prepaid taxes 108 150 253
Prepaid services 12 17 12
Other receivables 0 1 0
TOTAL 776 559 1,345

No write-downs of receivables have been made in Q3 2023 or Q3 2022.

ANALYSIS OF TRADE RECEIVABLES BY AGING

thousand € 30.09.2023 31.12.2022 30.09.2022
Not past due 558 373 1,075
incl receivables from customers who also
have receivables past due
210 236 310
incl receivables from customers who
have no receivables past due
348 137 765
Past due but not impaired 98 18 5
Overdue up to 90 days 98 16 2
Overdue more than 90 days 0 2 3
TOTAL 656 391 1,080

NOTE 3 INVENTORIES

€ thousand 30.09.2023 31.12.2022 30.09.2022
Raw materials and other materials 209 401 425
Work-in-progress 30 228 129
Finished goods 747 1,081 303
Prepayments to suppliers 25 2 57
Write-off reserve for inventories (40) (40) (40)
TOTAL 971 1,672 874

NOTE 4 INVESTMENT PROPERTY

INVESTMENT PROPERTY BY LOCATION:

thousand €
31.12.2021
Share of registered immovable property at Suur-Jõe Street 48, Pärnu 977
Share of registered immovable property at Rääma Street 31, Pärnu 175
30.09.2022
Share of registered immovable property at Suur-Jõe Street 48, Pärnu 981
Share of registered immovable property at Rääma Street 31, Pärnu 175
31.12.2022
Share of registered immovable property at Suur-Jõe Street 48, Pärnu 1,684
Share of registered immovable property at Rääma Street 31, Pärnu 175
30.09.2023
Share of registered immovable property at Suur-Jõe Street 48, Pärnu 1,684
Share of registered immovable property at Rääma Street 31, Pärnu 175

The property belonging to Pärnu Riverside Development OÜ, Suur-Jõe street 48 in Pärnu and the part of the property belonging to Nordic Fibreboard Ltd OÜ, Rääma street 31 are recorded as real estate investments.

The amount of expenses related to the management of investments properties for Q3 2023 were € 13 thousand and € 15 thousand in Q3 2022. Rental income from investment properties for Q2 2023 was € 11 thousand and in Q3 2022 were € 9 thousand.

thousand €
Carrying amount 31.12.2021 1,152
Capitalized cost 4
Carrying amount 30.09.2022 1,156
Carrying amount 31.12.2022 1,859
Carrying amount 30.09.2023 1,859

NOTE 5 PROPERTY PLANT EQUIPMENT AND RIGHT OF USE ASSETS

thousand € Land Buildings Machinery Other Construct Right-of TOTAL
and and fixtures ion-in use asset
facilities equipment progress
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 0 151 44 239
Reclassification 0 0 265 0 (255) (10) 0
Reclassification of
acumulated deprication
0 0 (10) 0 0 10 0
Disposals and write-offs
(Note 18)
(7) 0 (80) 0 0 (29) (116)
Accumulated depreciation
of fixed assets written off
0 0 80 0 0 9 89
Depreciation (Notes 14) 0 (59) (278) 0 0 (35) (372)
Cost at 30.09.2022 184 2,556 11,074 89 369 119 14,391
Accumulated depreciation
at 30.09.2022
0 (1,837) (7,667) (88) 0 (44) (9,636)
Carrying amount at
30.09.2022
184 718 3,407 1 369 75 4,755
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
Additions 0 0 17 0 198 56 271
Reclassification 0 0 159 0 (159) 0 0
Disposals and write-offs
(Note 18)
0 0 (3) 0 0 (75) (78)
Accumulated depreciation
of fixed assets written off
0 0 3 0 0 69 72
Depreciation (Note 14) 0 (59) (278) (0) 0 (28) (366)
Cost at 30.09.2023 184 2,560 11,203 89 444 100 14,580
Accumulated depreciation
at 30.09.2023
0 (1,916) (7,990) (88) 0 (16) (10,010)
Carrying amount at
30.09.2023
184 644 3,213 1 444 84 4,570

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NOTE 6 INTANGIBLE ASSETS

thousand € Computer software
Cost at 31.12.2021 13
Accumulated amortisation at 31.12.2021 (10)
Carrying amount 31.12.2021 3
Amortisation charge (Note 14) (1)
Cost at 30.09.2022 13
Accumulated amortisation at 30.09.2022 (11)
Carrying amount 30.09.2022 2
Cost at 31.12.2022 13
Accumulated amortisation at 31.12.2022 (11)
Carrying amount 31.12.2022 2
Amortisation charge (Note 14) (1)
Cost at 30.09.2023 13
Accumulated amortisation at 30.09.2023 (12)
Carrying amount 30.09.2023 1

NOTE 7 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

thousand € 30.09.2023 Change 9M
2023
31.12.2022 31.12.2021
Non-current assets
Listed securities - Equity securities - cost as at 338 338 338
Revaluation 336 30 306 306
Fair value as at 674 30 644 644

* 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 30.09.2023 as shown on Nasdaq Tallinn.

NOTE 8 BORROWINGS

Nordic Fibreboard AS subsidiary Nordic Fibreboard Ltd OÜ has loan obligations to Coop Pank AS and Rural Development Foundation (RDF). The term of the loan received from Coop Pank AS is 5 years with a 10-year amortization schedule, and as of 30.09.2023 the loan interest was 6 month EURIBOR+3.5% per annum. The term of the loan received from RDF is 6 years and from 31.12.2022 the loan interest is 4% per annum. There is also a one-year overdraft agreement with Coop Bank AS with a limit of € 200 thousand, in 2023, the overdraft interest rate was 4.2% per annum.

After the balance sheet date of 30.09.2023, the volume and terms of loan agreements of Coop Pank AS were changed. In the tables below, loan obligations and conditions are reflected as of 30.09.2023.

In 2023, Nordic Fibreboard Ltd OÜ received a short-term loan of € 200 thousand at an interest rate of 8% per year from Pärnu Holdings AS, a related party.

In Q3 2023, repayments of lease obligations in the amount of € 39 thousand were made.

thousand € Interest rate 30.09.2023 31.12.2022 30.09.2022
Current borrowings
Current portion of long-term loan
(Coop Bank)
6 month EURIBOR
+margin 3.5%
32 106 27
Current portion of long-term loan
(RDF)
Until 30.12.2022 2%,
later 4%
28 83 0
Current portion of long-term lease
liability
2.49% 5 31 11
Short term loan from related parties 8% 200 0 0
Bank overdrafts (Coop Bank) 4.2% 53 70 0
Total 318 290 38
Non-current borrowings
Non-current portion of long-term
loan (Coop Bank)
6 month EURIBOR
+margin 3.5%
926 926 1,031
Non-current portion of long-term
loan (RDF)
Until 30.12.2022 2%,
later 4%
1,689 1,917 2,000
Non-current portion of long-term
lease liabilities
2.49% 69 32 63
Total 2,684 2,875 3,094
Total borrowings 3,002 3,165 3,132

INFORMATION REGARDING BORROWINGS AS AT:

CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES 9M 2023

thousand € 31.12.2022 Cash
flows
Non
monetary
movements
Interest
accrued
Interest
paid
Reclassi
fication
30.09.202
3
Current portion of long-term
loan (Coop Bank)
106 (74) 0 73 (73) 0 32
Current portion of long-term
loan (RDF)
83 (83) 0 58 (58) 28 28
Current portion of long-term
lease liabilies
31 (39) 13 2 (2) 0 5
Short term loan from related
parties
0 200 0 0 0 0 200
Bank overdrafts (Coop Bank) 70 (17) 0 2 (2) 0 53
Non-current portion of long
term loan (Coop Bank)
926 0 0 0 0 0 926
Non-current portion of long
term loan (RDF)
1,917 (200) 0 0 0 (28) 1,689
Non-current portion of long
term lease liabilities
32 0 36 0 0 0 69
Total liabilities from
financing activities
3,165 (213) 49 135 (135) 0 3,002

For the 3rd Quarter of 2023

19

thousand € 31.12.2021 Cash
flows
Non
monetary
movements
Interest
accrued
Interest
paid
Reclassi
fication
30.09.2022
Current portion of long-term
loan (Coop Bank)
100 (76) 0 32 (32) 3 27
Current portion of long-term
lease liabilies
46 (35) 0 1 (1) 0 11
Bank overdrafts (Coop Bank) 0 0 0 1 (1) 0 0
Non-current portion of long
term loan (Coop Bank)
1,034 0 0 0 0 (3) 1,031
Non-current portion of long
term loan (RDF)
2,000 0 0 57 (57) 0 2,000
Non-current portion of long
term lease liabilities
40 0 23 0 0 0 63
Total liabilities from
financing activities
3,220 (111) 23 91 (91) 0 3,132

CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES 9M 2022

NOTE 9 PAYABLES AND PREPAYMENTS

thousand € 30.09.2023 31.12.2022 30.09.2022
Trade payables 765 471 965
Payables to employees 131 145 152
incl. accrued holiday pay reserve 50 50 46
Tax liabilities 107 133 140
incl. social security and unemployment insurance 68 83 86
personal income tax 30 40 41
contribution to mandatory funded pension 1 2 2
other taxes 8 8 11
Prepayments received 73 246 99
Other payables 33 19 54
TOTAL 1,109 1,014 1,410

NOTE 10 PROVISIONS

thousand €
Balance at 31.12.2021 164
incl. current portion of provision 19
incl. non-current portion of provision 145
Movements 2022 9M:
Use of provision (19)
Interest cost (Note 19) 4
Balance at 30.09.2022 149
incl. current portion of provision 4
incl. non-current portion of provision 145
Balance at 31.12.2022 145
incl. current portion of provision 18
incl. non-current portion of provision 127

Nordic Fibreboard AS Consolidated Interim Report For the 3rd Quarter of 2023

Movements 2023 9M:
Use of provision (19)
Interest cost (Note 19) 4
Balance at 30.09.2023 130
incl. current portion of provision 3
incl. non-current portion of provision 127

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 30.09.2023 0.10 4,499,061 450
Balance at 31.12.2022 0.10 4,499,061 450
Balance at 30.09.2022 0.10 4,499,061 450
Balance at 31.12.2021 0.10 4,499,061 450

As of 30.09.2023 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 30.09.2023 the Group had 1,122 shareholders of which with more than 5% ownership interest were:

Shareholder Number of shares (pcs) Ownership interest (%)
NFB Pärnu Holdings OÜ 1,750,135 38.90
Pärnu Holdings OÜ 842,640 18.73
OÜ Kõik või Mittemidagi 643,899 14.31

As at 30.09.2022 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 613,991 13.65

As at 30.09.2023 and 30.09.2022 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:

  • Rando Tomingas 0 shares (30.09.2022: 0 shares)
  • Sakari Wallin 0 shares (30.09.2022: 0 shares)
  • Aigar Kallas 0 shares (30.09.2022: 0 shares)
  • Torfinn Losvik 0 shares (30.09.2022: 0 shares)
  • Kevin Gustasson 0 shares (30.09.2022: 0 shares)

At the extraordinary general meeting of Nordic Fibreboard AS held on 13.07.2023, Trond Brekke was recalled from the Supervisory Board of Nordic Fibreboard AS, and Aigar Kallas who does not own Nordic fibreboard AS shares, was confirmed as a new member of the Supervisory Board.

Torfinn Losvik have indirect ownership through Pärnu Holdings OÜ, in addition, he owns shares through Stetind OÜ in the amount of 44,206 shares (30.09.2022: 44,206 shares). Rando Tomingas owns shares through Triangel Kapital OÜ in the amount of 36,762 shares (30.09.2022: 36,762 shares).

NOTE 12 EARNINGS PER SHARE

Basic earnings per share have been calculated by dividing the profit (loss) 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.

30.09.2023 31.12.2022 31.12.2021
Net profit (-loss) (in thousands of euros) (567) 1,234 1,202
Weighted average number of shares (th pc) 4,499 4,499 4,499
Basic earnings per share (in euros) (0.13) 0.27 0.27
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) (0.13) 0.27 0.27
Last price of the share of Nordic Fibreboard AS on
Tallinn Stock Exchange (in euros)
1.00 1.60 1.95

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.

In 2022 and 2023, the furniture retail sales in Estonia (Skano Furniture OÜ) has not been treated separately since the said subsidiary ceased active operations in the first quarter of 2020. Skano Furniture OÜ was liquidated 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. The Group defines EBITDA as profit before extraordinary other operating costs and net finance costs and tax, depreciation and impairment charges. As extraordinary other business expenses, the Group has treated one-time expenses that have not arisen in the course of normal business activities, but have arisen from some extraordinary circumstances. EBITDA is not a performance measure defined in IFRS. The Group`s definition of EBITDA may not be comparable to similarly titled operating profit measures and disclosures by other entities.

For the 3rd Quarter of 2023

All amounts provided to the Management Board are measured in a manner consistent with that of the financial statements.

9 months 2023
thousand €
Fibreboard
manufacturing
and wholesale
Real Estate
Management
Group's
general
expenses and
eliminations
SEGMENTS
TOTAL
Revenue from external customers 6,358 34 0 6,392
EBITDA 383 (19) (30) 334
Amortisation/ depreciation (Notes 5; 6) 367 0 0 367
Operating profit/-loss 16 (19) (30) (33)
Extraordinary expenses 406 0 0 406
Finance income (Note 19) 74 0 0 74
Finance costs (Note 19) 200 0 2 202
Net profit/-loss (516) (19) (32) (567)
Segment assets 7,489 1,688 (280) 8,897
Non-current assets of the segment (Notes
4;5;6;7)
5,420 1,684 0 7,104
Segment liabilities 4,246 54 80 4,380
Additions to non-current assets (Notes 5; 6) 271 0 0 271
9 months 2022
thousand €
Fibreboard
manufacturing
and wholesale
Real Estate
Management
Group's
general
expenses and
eliminations
SEGMENTS
TOTAL
Revenue from external customers 9,015 28 0 9,043
EBITDA 1,114 (18) (25) 1,071
Amortisation/ depreciation (Notes 5; 6) 372 0 0 372
Operating profit/-loss 743 (18) (26) 699
Finance income (Note 19) 248 0 0 248
Finance costs (Note 19) 96 0 3 99
Net profit/-loss 894 (18) (28) 848
Segment assets 8,599 985 (195) 9,389
Non-current assets of the segment (Notes
4;5;6;7)
5,718 981 1 6,700
Segment liabilities 4,544 24 123 4,691
Additions to non-current assets (Note 5;6) 239 4 0 243

SALES REVENUE OF BUSINESS BY THE GEOGRAPHICAL LOCATION OF CUSTOMERS:

thousand € 9M 2023 9M 2022
Fibreboard
manu
facturing and
wholesale
Real Estate
Management
SEGMENTS
TOTAL
Fibreboard
manu
facturing and
wholesale
Real Estate
Management
SEGMENTS
TOTAL
European Union 5,855 34 5,889 8,425 28 8,453
Middle East 96 0 96 73 0 73
Asia 102 0 102 69 0 69
Africa 133 0 133 0 0 0
Russia 0 0 0 427 0 427
Other 172 0 172 21 0 21
TOTAL 6,358 34 6,392 9,015 28 9,043

NOTE 14 COST OF GOODS SOLD

thousand € Q3 2023 Q3 2022 9M 2023 9M 2022
Raw materials and main materials 503 1,073 1,471 2,924
Electricity and heat, water 515 964 1,963 2,821
Labour expenses (Note 17) 286 409 933 1,207
Depreciation (Notes 5;6) 122 124 367 372
Purchased goods 0 0 127 0
Change in balances of finished goods and
work in progress
(33) (235) 513 (348)
Other expenses 40 52 123 158
TOTAL 1,433 2,387 5,497 7,134

NOTE 15 DISTRIBUTION COSTS

thousand € Q3 2023 Q3 2022 9M 2023 9M 2022
Transportation expenses 69 206 339 709
Labour expenses (Note 17) 48 46 138 138
Agency fees 12 24 48 57
Marketing expense 0 0 2 0
Other expenses 4 2 9 13
TOTAL 133 278 536 919

NOTE 16 ADMINISTRATIVE AND GENERAL EXPENSE

thousand € Q3 2023 Q3 2022 9M 2023 9M 2022
Labour expenses (Note 17) 57 54 167 173
Purchased services 22 15 112 70
Office supplies 11 12 44 35
Other expenses 10 9 51 37
TOTAL 100 90 374 315

NOTE 17 LABOUR EXPENSES

thousand € Q3 2023 Q3 2022 9M 2023 9M 2022
Wages and salaries 294 384 935 1,147
Social security and unemployment insurance 96 124 304 371
Fringe benefits paid to employees 2 2 5 8
TOTAL 392 510 1,244 1,526

NOTE 18 OTHER OPERATING INCOME AND EXPENSES

OTHER OPERATING INCOME

thousand € Q3 2023 Q3 2022 9M 2023 9M 2022
Compensation from insurance 0 33 0 33
TOTAL 0 33 0 33

OTHER OPERATING EXPENSES

thousand € Q3 2023 Q3 2022 9M 2023 9M 2022
Reclamations 0 0 2 3
Contract fees 0 0 1 1
Membership fees 4 0 5 1
Penalties paid 0 1 4 3
Loss from sales of fixed assets 0 0 0 1
Other costs 0 0 6 0
TOTAL 4 1 18 9

23

NOTE 19 FINANCIAL INCOME AND EXPENSES

FINANCIAL INCOME

thousand € Q3 2023 Q3 2022 9M 2023 9M 2022
Receiced dividends 0 0 0 105
Revaluation of TPD share 0 79 74 143
Total financial income 0 79 74 248

FINANCIAL EXPENSES

thousand € Q3 2023 Q3 2022 9M 2023 9M 2022
Interest expenses 55 30 154 95
including interest expenses related to
provisions (Note 10)
1 1 4 4
Revaluation of TPD shares 24 0 44 0
Other finance cost 0 0 4 4
Total financial cost 79 30 202 99

NOTE 20 RELATED PARTIES

The following parties are considered to be related parties:

  • 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 September 2023, Joakim Johan Helenius, the owner of NFB Pärnu Holdings OÜ, had significant influence over the Group (indirect and direct shareholding of 48.71% in the Company). As of 30 September 2022, the persons with significant influence over the Group were Stetind OÜ (owned by 100% Torfinn Losvik) and Joakim Johan Helenius who both held 50% shareholding in Pärnu Holdings OÜ, a company which owned 57.63% of the Company

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

thousand € Q3 2023 Q3 2022 9M 2023 9M 2022
Membership fees 61 49 154 147
Social tax 20 16 51 49
Total 81 65 205 196

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.

TRANSACTIONS WITH RELATED PARTIES:

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

thousand € Q3 2023 Q3 2022 9M 2023 9M 2022
Purchased services 5 4 15 12
Total 5 4 15 12
24
thousand € 30.09.2023 31.12.2022 30.09.2022 31.12.2021
Purchased services 9 1 1 1
Short-term loan 200 0 0 0
Total 209 1 1 1

BALANCES WITH RELATED PARTIES AS OF:

NOTE 21 EVENTS AFTER BALANCE SHEET DATE

At the extraordinary general meeting of Nordic Fibreboard AS held on 10.10.2023, Joakim Johan Helenius was re-elected as a member of the Supervisory Board of Nordic Fibreboard AS, who owned 20,000 Nordic Fibreboard AS shares as of 30.09.2023 and 30.09.2022. Joakim Johan Helenius have indirect ownership through companies NFB Pärnu Holdings OÜ and Pärnu Holdings OÜ.

The Supervisory Board of AS Nordic Fibreboard elected Enel Äkke as a new member of the Management Board whose powers began on 10.10.2023 and are valid for 3 years. Enel Äkke does not own Nordic Fibreboard AS shares. The Supervisory Board of Nordic Fibreboard AS recalled Torfinn Losvik from the Management Board as of 06.11.2023.

At the extraordinary general meeting of Nordic Fibreboard AS held on 27.11.2023, Aigar Kallas was recalled from the Supervisory Board of Nordic Fibreboard AS, Torfinn Losvik was elected as a new member of the Supervisory Board. The council of Nordic Fibreboard AS elected Aigar Kallas as a new member of the Management Board whose mandate began on 22.11.2023 and are valid for 3 years.

On 15.11.2023, an amendment to the overdraft agreement was concluded with Coop Pank AS, which increased the overdraft limit from € 200 thousand to € 700 thousand and confirmed the new interest rate of 6 months EURIBOR+2.9% per year. The contract amendment is valid until 30.04.2025.

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