Published: 2020-08-17 14:04:54 CEST
Nordic Fibreboard
Quarterly report

Unaudited financial results of Nordic Fibreboard AS for the second quarter of 2020

Management report

Consolidated net sales for Q2 2020 were € 2.48 million from continuing operations (Q2 2019: € 3.48 million from continuing operations). The sales revenue of the Group`s main business segment, fibreboard, for Q2 2020 were € 2.43 million (Q2 2019: € 3.01 million). The main reason for this drop in sales was due to the closure of the Püssi factory in March 2020, which came about as a result of the loss of orders from customers within the display board industry caused by the COVID-19 pandemic. Furniture retail sales revenue for Q2 2020 were € 8 thousand, the decrease in sales (compared to Q2 2019: € 468 thousand) was due to the Group exiting the furniture retail segment earlier this year, with some remaining stock sales taking place during Q2 2020. Rental and property development sales, includes the resale of utilities, in Q2 2020 were € 44 thousand (Q2 2019: € 16 thousand). Revenue from rental and property development increased due to more tenants being secured for the premises in Suur-Jõe 48, Pärnu.

Group EBITDA for Q2 2020 was positive € 347 thousand from continuing operations (Q2 2019: € 52 thousand), of which the fibreboard division EBITDA was € 342 thousand (Q2 2019: € 13 thousand). After depreciation and interest, group net profit for Q2 2020 was € 194 thousand from continuing operations (Q2 2019 net loss of € 179 thousand from continuing operations).

The Group`s consolidated EBITDA has improved compared to the same period last year, the main reason being the much improved performance of the fibreboard division. The closure of the Püssi fibreboard factory enabled us to switch the Püssi factory construction sector orders to our Pärnu factory, and we started a 4th shift in Pärnu in April 2020 as a result thereof. The Pärnu factory is now running all the time, except for a one-shift maintenance stop every month. This has led to increased machine utilisation, and gross margin for Fibreboard has therefore increased substantially, being 31% in Q2 2020 (from being 15% in Q2 2019).

Divisional review

Revenue by business segments

  € thousand € thousand
  Q2 2020 Q2 2019 6M 2020 6M 2019
Continued operations        
Fibreboards production and sales 2,426 3,013 5,517 5,906
Furniture retail 8 468 55 861
Real Estate Management 44 16 113 16
Group transactions 0 (18) (0) (20)
TOTAL from continued operations 2,479 3,480 5,685 6,763
     
Discontinued operations 0 408 0 954
     
TOTAL 2,479 3,888 5,685 7,717

 

Profit by business segments

€ thousand Q2 2020 Q2 2019 6M 2020 6M 2019
Continued operations        
EBITDA by business units:        
Fibreboards production and sales 342 13 88 36
Furniture retail 8 (16) (39) (38)
Real Estate Management (1) 16 (3) 16
Group transactions (2) 39 (9) 50
TOTAL EBITDA 347 52 37 64
Depreciation 135 166 287 316
TOTAL OPERATING PROFIT/ LOSS 212 (114) (250) (252)
Net financial costs 18 65 90 129
Income tax 0 0 0 0
NET PROFIT/ LOSS from continued operations 194 (179) (340) (381)
     
Net profit/loss from discontinued operations 0 (121) 0 (243)
     
TOTAL 194 (300) (340) (624)

Nordic Fibreboard Ltd

Fibreboard sales in Q2 2020 were € 2.43 million (2019: € 3.01 million). We sold our products to customers in 18 countries during Q2 2020. The main reason for the drop in sales was the loss of display board customers, boards for this sector was produced in the Püssi factory, which we closed in March 2020. However, sales to our customers within the construction sector in our main northern European markets have been stable. Finland, our largest market with 29% of our fibreboard sales this year, were up 4% in Q2. Sales to Denmark, Sweden, Estonia, and Latvia, together accounting for 45% of sales in Q2, were flat, while we recorded sales decline in markets further afield mainly due to the negative effect in such markets caused by the corona virus. 

By adding a 4th shift in our Pärnu production, and thus achieving full machine utilisation, has led to a strong increase in Fibreboard’s gross margin from being 15% in Q2 2019 to now reaching 31% in Q2 2020. Overhead costs for Q2 2020 was down 6% compared to Q2 2019, and EBITDA for Q2 2020 was thus positive € 342 thousand (14% of sales in Q2 2020), compared Q2 2019 EBITDA positive € 13 thousand.

FIBREBOARD SALES BY GEOGRAPHICAL SEGMENTS

  € thousand € thousand
  Q2 2020 Q2 2019 6M 2020 6M 2019
European Union 2,115 2,236 4,856 4,329
Russia 276 425 486 753
Asia 22 80 60 243
Africa 0 156 34 298
Middle East 6 39 45 126
Other 7 77 36 157
TOTAL 2,426 3,013 5,517 5,906

SKANO FURNITURE: RETAIL SALES

Furniture retail sales in Q2 2020 were € 8 thousand (2019 Q2 € 468 thousand). However, this business has been closed down, as earlier informed, and the sales recorded in Q2 2020 was from some remaining stock.

RETAIL SALES BY COUNTRIES

  € thousand € thousand Number of stores 
  Q2 2020 Q2 2019 6M 2020 6M 2019 30.06.2020 30.06.2019
Estonia 8 364 55 621 0 3
Latvia 0 45 0 85 0 1
Lithuania 0 59 0 155 0 1
TOTAL (ongoing shops) 8 468 55 861 0 5

PÄRNU RIVERSIDE DEVELOPMENT

Rental income, including the resale of utilities, was € 44 thousand in Q2 2020. We incurred operational costs and costs associated with the ongoing detail planning application, which resulted in negative EBITDA of € 3 thousand for Q2 2020.

 

STATEMENT OF FINANCIAL POSITION AND CASH FLOW STATEMENT

As of 30.06.2020 the total assets of Nordic Fibreboard AS were € 8.1 million (30.06.2019: € 10.3 million). The liabilities of the company as of 30.06.2020 were € 6.9 million (30.06.2019: € 8.0 million), of which Group has borrowings of € 4.5 million as at 30.06.2020 (30.06.2019: € 4.9 million).

Receivables and prepayments amounted to € 1.2 million as at 30.06.2020 (30.06.2019: € 1.8 million). Inventories were € 0.4 million as of 30.06.2020 (30.06.2019: € 1.7 million).  Investment property increased due to reclassification from € 187 thousand as at 30.06.2019 to € 1.1 million as at 30.06.2020. Financial investments (i.e. Trigon Property Development shares) increased from € 399 thousand as at 30.06.2019 to € 414 thousand as at 30.06.2020. Property, plant, equipment and intangibles were € 4.9 million as of 30.06.2020 (€ 6.2 million as of 30.06.2019).

During 2020 6M, the Group’s cash flows from operating activities totalled cash inflow of € 104 thousand (2019 6M: cash outflow € 207 thousand). Investment activities resulted in cash outflows in amount of € 53 thousand during 2020 6M, compared to outflows in amount € 46 thousand during 6M 2019. Financing activities also resulted in cash outflows of € 53 thousand during 6M 2020 (2019 6M: cash outflow € 145 thousand). Net cash effect during 2020 6M showed cash outflows of € 2 thousand, (2019 6M: cash inflows € 16 thousand).

Outlook

Nordic Fibreboard LTD

The order book from our traditional customers in our largest markets in northern Europe remains strong, although it is very difficult to predict what will happen in the future due to the continuing uncertainty surrounding the COVID-19 pandemic.

Pärnu Riverside Development

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

People

On the 30th of June 2020, the Group employed 97 people (compared to 124 people as of 30.06.2019 from continuing operations). The average number of personnel in Q2 2020 was 116 (Q2 2018: 121 from continuing operations).

For six months of 2020, wages and salaries with taxes amounted to € 1.1 million from continuing operations (six months 2019: € 1.2 million from continuing operations). Payments made to management board members of all group companies including all subsidiaries with relevant taxes were € 104 thousand during 6M 2020 and € 110 thousand during 6M 2019.

FINANCIAL HIGHLIGHTS

€ thousand     
Income statement Q2 2020 Q2 2019 6M 2020 6M 2019
Revenue 2,479 3,480 5,685 6,763
EBITDA 347 52 37 64
EBITDA margin 14% 1% 1% 1%
Operating profit 211 (114) (250) (252)
Operating margin 9% (3%) (4%) (4%)
Net profit 194 (179) (340) (381)
Net margin 8% (5%) (6%) (6%)
         
Discontinued operations 0 (121) 0 (243)
         
TOTAL NET PROFIT 194 (300) (340) (624)
     
         
Statement of financial position 30.06.2020 31.12.2019 30.06.2019 31.12.2018
Total assets 8,077 9,045 10,281 10,307
Return on assets 2% (12%) (4%) (3%)
Equity 1,222 1,542 2,297 2,901
Return on equity 16% (73%) (17%) (12%)
Debt-to-equity ratio 85% 83% 78% 72%
     
Share 30.06.2020 31.12.2019 30.06.2019 31.12.2018
Last Price* 0.32 0.41 0.44 0.36
Earnings per share (0.08) (0.31) (0.14) (0.20)
Price-earnings ratio (4.26) (1.32) (3.15) (1.81)
Book value of a share 0.27 0.34 0.51 0.64
Market to book ratio 1.19 1.20 0.85 0.56
Market capitalization, € thousand 1,449 1,845 1,962 1,611
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 = 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/

Consolidated statement of financial positions

€ thousand 30.06.2020 31.12.2019 30.06.2019 31.12.2018
Cash and cash equivalents (Note 2) 5 7 70 54
Receivables and prepayments (Note 3) 1,175 1,394 1,764 1,142
Inventories (Note 4) 443 894 1,679 2,255
Total current assets 1,623 2,296 3,513 3,452
         
Investment property (Note 5) 1,125 1,121 187 175
Available-for-sale financial assets (Note 8) 414 397 399 422
Property, plant and equipment (Note 6) 4,902 5,212 6,155 6,223
Intangible assets (Note 7) 13 19 27 34
Total non-current assets 6,454 6,749 6,769 6,855
         
TOTAL ASSETS 8,077 9,045 10,281 10,307
         
Borrowings (Notes 9) 4,462 4,547 602 662
Payables and prepayments (Notes 10) 2,158 2,665 2,874 2,418
Short-term provisions (Note 11) 9 20 10 15
Total current liabilities 6,629 7,232 3,487 3,095
         
Long-term borrowings (Notes 9) 47 92 4,288 4,102
Long-term provisions (Note 11) 179 179 210 210
Total non-current liabilities 226 271 4,498 4,311
Total liabilities 6,855 7,503 7,985 7,406
         
Share capital (at nominal value) (Note 12) 2,699 2,699 2,699 2,699
Share premium 0 364 364 364
Statutory reserve capital 0 288 288 288
Other reserves 104 84 65 45
Unrealised currency differences 0 0 0 0
Retained earnings (loss) (1,582) (1,894) (1,119) (496)
Total equity 1,222 1,542 2,297 2,901
         
TOTAL LIABILITIES AND EQUITY 8,077 9,045 10,281 10,307

*The notes to the financial statements presented on pages 15 to 31 are an integral part of these consolidated financial statements.

 

Consolidated statement of profit or loss and other comprehensive income

€ thousand Q2 2020 Q2 2019 6M 2020 6M 2019
Revenue (Note 14) 2,479 3,480 5,685 6,763
Cost of goods sold (Note 15) 1,798 2,963 4,617 5,846
Gross profit 681 517 1 068 917
         
Distribution costs (Note 16) 306 455 733 857
Administrative expenses (Note 17) 129 131 304 255
Other operating income (Note 19) 1 0 2 22
Other operating expenses (Note 19) 35 45 283 79
Operating profit (loss) 212 (114) (250) (252)
         
Finance income (Note 20) 36 0 37 0
Finance costs (Note 20) 54 65 127 129
PROFIT (LOSS) BEFORE INCOME TAX 194 (179) (340) (381)
         
NET PROFIT (LOSS) FOR THE PERIOD FROM CONTINUING OPERATIONS 194 (179) (340) (381)
         
Net profit (loss) for the period from discontinuing operations 0 (121) (0) (243)
NET PROFIT (LOSS) FOR THE PERIOD 194 (300) (340) (624)
         
TOTAL COMPREHENSIVE PROFIT (LOSS) FOR THE PERIOD 194 (300) (340) (624)
         
Basic earnings per share (Note 13) 0.04 (0.07) (0.08) (0.14)
Diluted earnings per share (Note 13) 0.04 (0.07) (0.08) (0.14)

*The notes to the financial statements presented on pages 15 to 31 are an integral part of these consolidated financial statements.

Consolidated statement of changes in equity

€ thousand Share capital Share premium Statutory reserve capital Other reserves Retained earnings Total
             
Balance at 31.12.2018 2,699 364 288 45 (496) 2 901
             
Share options 6M 2019 0 0 0 20 0 20
Net loss for 6M 2019 0 0 0 0 (624) (624)
Other comprehensive income for 6M 2019 0 0 0 0 0 0
Total comprehensive loss for 6M 2019 0 0 0 0 (624) (624)
Balance at 30.06.2019 2,699 364 288 65 (1,119) 2,297
             
Balance at 31.12.2019 2,699 364 288 84 (1,894) 1,542
             
Share options 6M 2020 0 0 0 20 0 20
Other changes 0 (364) (288) 0 652 0
Net loss for 6M 2020 0 0 0 0 (340) (340)
Other comprehensive income for 6M 2020 0 0 0 0 0 0
Total comprehensive loss for 6M 2020 0 0 0 0 (340) (340)
Balance at 30.06.2020 2,699 0 0 104 (1,582) 1,222

*The notes to the financial statements presented on pages 15 to 31 are an integral part of these consolidated financial statements.


 

TORFINN LOSVIK
Chairman of the board
Phone: +372 56 99 0988
torfinn.losvik@nordicfibreboard.com


 


 

 

Attachment


Nordic Fibreboard Interim Report 2020 Q2 and 6M_ENG.pdf