Published: 2019-05-31 10:08:56 CEST
Nordic Fibreboard
Quarterly report

Skano Group AS Interim Report for First Quarter of 2019


SKANO GROUP AS UNAUDITED results for first quarter of 2019

Consolidated net sales for Q1 2019 were € 3.83 million, being a 3% increase compared to the same period in 2019. Fibreboard sales increased with 6%, driven mainly by new customers in EU and increased sales to existing customers in the emerging markets. Furniture wholesale sales dropped by 10%, of which the main reason was the reduced demand experienced in Russia. The reduced demand is still caused by declining consumer confidence, affecting purchasing behavior due to geopolitical reasons. Furniture retail sales were up 18%, mainly due to more active marketing campaign activities in all Baltic shops.

Skano Group recorded EBITDA of negative € 76 thousand for Q1 2019 (vs negative € 23 thousand Q1 2018). Skano Fibreboard production cost was 85% of sales in Q1, which is an improvement from 2018 Q1 when production cost of sales was 99% of sales. However, the drop in inventory in Q1 led to reduced gross margin (13% compared to 17% in 2018 Q1). Furniture wholesale profitability was negatively influenced by the reduction in sales during Q1 2019 compared to Q1 2018, while furniture retail profitability remained at similar level as last year. Net loss for Q1 2019 was € 323 thousand (Q1 2018: loss of € 281 thousand).

Divisional review of first quarter

Revenue by business segments

  € thousand
  Q1 2019 Q1 2018
Fibreboards production and sales 2,893 2,723
Furniture production and sales 718 800
Furniture retail 392 332
Group transactions (175) (144)
TOTAL 3,829 3,711


Profit by business segments

€ thousand Q1 2019 Q1 2018
EBITDA by business units:    
Fibreboards production and sales 2 37
Furniture production and wholesale (68) (32)
Furniture retail (22) (20)
Group transactions 12 (8)
TOTAL EBITDA (76) (23)
Depreciation 176 191
Net financial costs 71 66
Income tax 0 0
NET PROFIT/ LOSS (323) (281)


SKANO FIBREBOARD: fibreboard sales

Fibreboard sales in Q1 2019 were € 2.89 million, which is 6% more than same period in 2018 (2018: € 2.72 million). We sold our products to customers in 28 countries during Q1 2019. We recorded sales increase in emerging markets in Asia and Africa while also securing new customers in EU. Finland, our largest market, continued to experience sales decline despite Skano keeping its market share within soft density fibreboard, thus reflecting the growth of other materials for use in the construction sector. Production cost was 85% of sales in Q1, which is an improvement from 2018 Q1 when production cost of sales was 99% of sales. However, the drop in inventory in Q1 led to reduced gross margin (13% compared to 17% in 2018 Q1). Fixed costs were however € 48 thousand less in 2019 Q1 compared to 2018 Q1. EBITDA ending up being positive € 2 thousand for Q1 2019 (Q1 2018 EBITDA was positive € 37 thousand).


  € thousand
  Q1 2019 Q1 2018
European Union 2,093 2,198
Russia 328 298
Asia 164 37
Africa 143 42
Middle East 86 73
Other 80 74
TOTAL 2,893 2,723

SKANO FURNITURE FACTORY: furniture production and wholesale

Furniture wholesale sales in Q1 2019 were € 718 thousand, 10% down on same period last year (Q1 2018: € 800 thousand). The main reason for this decline in sales was due to the reduced demand experienced in Russia, where our two distributors still face declining consumer confidence due to geopolitical reasons. Our Finnish distributor continued his downsizing of his operations in Finland. Skano assumed the Finnish distributor’s EU customers at the start of this year, which has resulted in our increased sales to several EU countries. Sales increase was also recorded to our own Baltic retail chain.

Production cost in Q1 2019 were € 632 thousand, which is € 192 thousand less compared to Q1 2018. We started during Q1 2019 to look for subcontractors for some of our early stage production, thus enabling us to reduce our production staffing. This process is ongoing and should result in us reducing our production cost further, while optimising the buying in of semi-finished products, which should improve profitability.

However, the reduced sales and decline in inventory led to EBITDA for furniture wholesale for Q1 2019 being negative € 68 thousand (Q1 2018 EBITDA was negative € 32 thousand).


  € thousand
  Q1 2019 Q1 2018
Russia 253 361
Finland 201 234
Skano Retail 173 141
Other countries 92 64
TOTAL 718 800

SKANO FURNITURE: retail sales

Furniture retail sales in Q1 2019 were € 392 thousand, up 18% (2018 Q1 € 332 thousand) from same period last year. The sales increase was driven mainly due to very well performing marketing campaign in all Baltic shops. However, the marketing campaign had decreasing effect on Gross Margin, leaving EBITDA for furniture retail for Q1 2019 to be negative € 22 thousand (Q1 2018 EBITDA was negative € 20 thousand).

Total Furniture operations of Skano (wholesale and retail) EBITDA for 2019 Q1 were negative € 90 thousand (Q1 2018 EBITDA was negative € 52 thousand).


  € thousand Number of stores 
  Q1 2019 Q1 2018 31.03.2019 31.03.2018
Estonia 256 204 4* 4
Latvia 40 74 1 1
Lithuania 96 54 1 1
TOTAL 392 332 6 6

* Operation in Pärnu mnt shop ended on the 28th February 2019, the lease contract terminated from 31st of May 2019 (See also Note 22).


As of 31.03.2019 the total assets of Skano Group AS were € 10.1 million (31.03.2018: € 11.8 million). The liabilities of the company as of 31.03.2019 were € 7.5 million (31.03.2018: € 8.4 million), of which Skano has borrowings of € 4.7 million as at 31.03.2019 (31.03.2018: € 5.7 million).

Receivables and prepayments amounted to € 1.4 million as at 31.03.2019 (31.03.2018: € 2.3 million). Inventories were € 1.9 million as of 31.03.2019 (31.03.2018: € 2.3 million).  Financial investments (i.e. Trigon Property Development shares) increased from € 187 thousand as at 31.03.2018 to € 410 thousand as at 31.03.2019. Property, plant, equipment and intangibles were € 6.1 million as of 31.03.2019 (€ 6.8 million as of 31.03.2018).

In 2019 Q1, the Group’s cash flows from operating activities totalled cash inflow of € 56 thousand (2018 Q1: cash outflow € 657 thousand). Investment activities resulted in cash outflows in amount of € 0 thousand in 2019 Q1, compared to outflows in amount € 3 thousand in Q1 2018. Financing activities also resulted in cash outflows of € 33 thousand in Q1 2019 (2018 Q1: cash inflow € 646 thousand). Net cash effect in 2019 Q1 cash inflow € 23 thousand, which compares favourable compared to 2018 Q1 cash outflows of € 14 thousand.



In Fibreboard, we are continuing to push for sales of our various applications which have more global reach than our traditional sales of windboards and insulation boards sold mainly in our traditional markets of Finland, Russia and Estonia. Our marketing activities are focusing on the positive aspects of using our boards, made from virgin woodchips from spruce, compared to competing synthetic materials.


The deal signed, with effect from start of this year, with our Finnish distributor to take over their export customers in Europe has expanded our customer base and shows promising sales growth potential of our furniture. In addition, we expect improved product profitability as we advance with our production outsourcing while reducing our own production cost.  The combination of these initiatives should bring sales growth and improved profitability, with the aim of achieving positive EBITDA.


In Furniture, we expect improved retail performance with the introduction of the new shop concept. This has been rolled out in our best-selling shop in Tallinn as well as in our newly opened shop in the Decco centre in Riga and will next be rolled out in our Vilnius and Tartu shops. We ended in Q1 2019 our shop operations of our second shop in Tallinn due to its poor profitability, and the rental contract of this shop will end 31st May 2019.  


On the 31st of March 2019, the Group employed 208 people (compared to 221 people as of 31.03.2018). The average number of personnel in Q1 2019 was 205 (Q1 2018: 222).

For three months of 2019, wages and salaries with taxes amounted to € 0.9 million (three months 2018: € 0.9 million). Payments made to management board members of all group companies including all subsidiaries with relevant taxes were € 51 thousand in Q1 2019 and € 40 thousand in Q1 2018.


€ thousand   
Income statement Q1 2019 Q1 2018
Revenue 3,829 3,711
EBITDA (76) (23)
EBITDA margin (2%) (1%)
Operating profit (252) (214)
Operating margin (7%) (6%)
Net profit (323) (281)
Net margin (8%) (8%)
Statement of financial position 31.03.2019 31.03.2018
Total assets 10,094 11,845
Return on assets (3%) (2%)
Equity 2,588 3,487
Return on equity (12%) (8%)
Debt-to-equity ratio 74% 71%
Share 31.03.2019 31.03.2018
Last Price (€)* 0.41 0.54
Earnings per share (€) (0.07) (0.06)
Price-earnings ratio (5.74) (8.66)
Book value of a share (€) 0,58 0.78
Market to book ratio 0.72 0.70
Market capitalization, € thousand 1,854 2,429
Number of shares, piece 4,4991,061 4,499,061


€ thousand31.03.201931.12.201831.03.201831.12.2017
Cash and cash equivalents (Note 2)78546074
Receivables and prepayments (Note 3)1,4031,1422,3181,215
Inventories (Note 4)1,9392,2552,3432,336
Total current assets3,4203,4524,7213,624
Investment property (Note 5)180175170170
Available-for-sale financial assets (Note 8)410422187182
Other shares and issues0006
Property, plant and equipment (Note 6)6,0536,2236,7246,908
Intangible assets (Note 7)30344347
Total non-current assets6,6756,8557,1247,313
TOTAL ASSETS10,09410,30711,84510,937
Borrowings (Notes 9)6296521,240593
Payables and prepayments (Notes 10)2,5512,4182,4861,956
Short-term provisions (Note 11)15151013
Total current liabilities3,1953,0853,7362,562
Long-term borrowings (Notes 9)4,1024,1124,4214,422
Long-term provisions (Note 11)210210200200
Total non-current liabilities4,3114,3214,6214,622
Total liabilities7,5077,4068,3587,184
Share capital (at nominal value) (Note 12)2,6992,6992,6992,699
Share premium364364364364
Statutory reserve capital288288293288
Other reserves (Notes 8; 12)5545189
Unrealised currency differences0000
Retained earnings (loss)(819)(496)113393
Total equity (Note 13)2,5882,9013,4873,753
TOTAL LIABILITIES AND EQUITY10,09410,30711,84510,937


€ thousandQ1 2019Q1 2018
Revenue (Note 14)3,8293,711
Cost of goods sold (Note 15)3,4813,291
Gross profit348420
Distribution costs (Note 16)428454
Administrative expenses (Note 17)160153
Other operating income (Note 19)223
Other operating expenses (Note 19)3530
Operating profit (loss) (Note 11)(252)(214)
Finance income (Note 20)01
Finance costs (Note 20)7167
Corporate income tax00
Other comprehensive income (loss)00
Other comprehensive income (loss) that can in certain cases be reclassified to the income statement  
Currency translation differences   
Basic earnings per share (Note 13)(0.07)(0.06)
Diluted earnings per share (Note 13)(0.07)(0.06)

Torfinn Losvik

Member of Management Board

+372 569 90 988


Skano interim report 2019 Q1.pdf