Tornator Oyj
Half-year report –Stock exchange release, 24 August 2023 at 8 AM
SUMMARY 1 JAN – 30 JUNE 2023 (1 JAN – 30 JUNE 2022)
- Net sales increased by 11.3% to €84.2 million (75.7). The ending of timber imports from Russia and the energy crisis had a positive impact on wood demand and prices.
- Operative operating profit increased by 7.3% to €60.8 (56.7) million. The operating profit as reported in accordance with the International Financial Reporting Standards (IFRS) was €130.1 million (46.0). The increase is explained by the application of the method of calculating the fair value of forestland based on transaction prices in the forest holdings market during the reporting period, and the resulting positive change in value (the method was not yet in use in the reference period).
- Tornator continued to purchase forestland in Finland. Nearly 10,000 hectares of new forestland was acquired, with a total investment of almost €50 million.
- The company increased its investment capacity by agreeing an addition of €100 million to its existing Revolving credit facility. In addition, the company restructured its long-term interest rate hedges to reduce direct financing costs and shorten the average maturity of the hedges. At the same time, the exposure of the interest rate hedge portfolio to changes in fair value due to fluctuations in market interest rates is significantly reduced.
- IFRS profit at fair value for the reporting period was €100.0 million. The change in the fair value of interest rate instruments was +€2.6 million (+94.6) before taxes. The increase in statistical prices in the forestland market had a positive impact of €63.4 million (-10.1) before taxes on the fair value of the growing stock.
- Comparable return on equity was 4.2% (6.3) and 10.1% (16.8) at fair value. The equity ratio was 59.5% (53.3).
Key figures (consolidated)
Key figures (consolidated)
| H1/2023 | H1/2022 | Change, % | |
| Net sales, € million | 84.2 | 75.7 | 11 % |
| Operating profit (IFRS), € million | 131.0 | 46.0 | 185 % |
| Operating profit, % | 155.5 | 60.7 | 156 % |
| Profit for the period (IFRS), € million | 100.0 | 107.8 | -7 % |
| Return on equity, % | 10.1 | 16.8 | -40 % |
| Return on capital employed, % | 9.3 | 4.5 | 108 % |
| Equity ratio, % | 59.5 | 53.3 | 12 % |
| Average number of personnel | 188 | 188 | 0 % |
| The key figures are calculated according to the International Financial Reporting Standards (IFRS). | |||
Comparable key figures
| H1/2023 | H1/2022 | Change, % | |
| Net sales, € million | 84.2 | 75.7 | 11 % |
| Operative operating profit, € million | 60.8 | 56.7 | 7 % |
| Operative operating profit, % | 72.2 | 74.9 | -4 % |
| Comparable net profit, € million | 41.3 | 40.6 | 2 % |
| Comparable return on equity, % | 4.2 | 6.3 | -34 % |
| Comparable return on capital employed, % | 4.4 | 5.5 | -21 % |
In addition to the official key figures presented above, the Tornator Group uses alternative performance measures that are comparable between years, thus better describing the success of operations. The comparable key figures have been calculated without fair value changes and apply to the whole Group. The key figures are calculated as follows:
| Operating profit, IFRS | 131,0 | ||
| - Change in fair value of biological assets | 63,4 | ||
| - Change in fair value of provisions and and receivables from additional wind power sales prices | 6,7 | ||
| = Operative operating profit, comparable | 60,8 | ||
| Profit for the period, IFRS | 100,0 | ||
| - Change in fair value of biological assets | 63,4 | ||
| - Change in fair value of provisions and long-term receivables | 6,7 | ||
| - Change in fair value of financial instruments | 2,6 | ||
| - Share of taxes of above mentioned items | -14,1 | ||
| = Comparable net profit | 41,3 | ||
For further information, please contact:
Chief Executive Officer (CEO) Henrik Nieminen, tel. +358 40 869 7613
Chief Financial Officer (CFO) Antti Siirtola, tel. +358 40 773 0975
Tornator is a leader in sustainable forestry in Europe. It owns forests in Finland, Estonia and Romania. In 2022, the group’s turnover was approximately €165 million, and the balance sheet value was about €3.2 billion. The group has around 190 employees. Tornator’s own employees, and other companies and their employees working on its forestland, add up to around 1,500 person-years of employment. The owners of the parent company are Finnish, mainly institutional investors. Tornator’s mission is to generate sustainable wellbeing from forests
Tables – Condensed half-year financial statements and notes
| EUR thousand | 30 June 2023 | 30 June 2022 | 31 Dec 2022 |
| (unaudited) | (unaudited) | (audited) | |
| Net sales | 84,204 | 75,672 | 164,641 |
| Other operating income | 4,391 | 2,583 | 11,666 |
| Change in fair value of biological assets and harvesting | 63,420 | -10,121 | 462,166 |
| Change in inventories of finished goods and work in progress | -254 | -993 | -2,488 |
| Materials and services | -12,437 | -10,342 | -30,071 |
| Personnel expenses | -5,584 | -5,170 | -10,301 |
| Depreciation and amortisation | -1,653 | -1,638 | -15,019 |
| Reversal of impairment | 3,400 | ||
| Other operating expenses | -4,528 | -4,032 | -8,577 |
| Operating profit | 130,959 | 45,960 | 572,017 |
| Financial income | 982 | 187 | 480 |
| Financial expenses | -12,088 | -6,830 | -14,118 |
| Change in fair value of financial instruments | 2,636 | 94,572 | 110,902 |
| Net financial items | -8,470 | 87,930 | 97,264 |
| Profit before tax | 122,490 | 133,890 | 669,281 |
| Income taxes | -9,510 | -28,413 | -42,897 |
| Change in deferred taxes | -13,004 | 2,343 | -84,456 |
| Profit for the period | 99,976 | 107,820 | 541,927 |
| Distribution: | |||
| To shareholders of the parent company | 99,976 | 107,820 | 541,927 |
| Consolidated statement of comprehensive income | |||
| Profit for the period | 99,976 | 107,820 | 541,927 |
| Other comprehensive income for the period after taxes: | |||
| Items not recognised later through profit and loss | |||
| Other items of comprehensive income (after taxes) | 31 | ||
| Items that may later be recognised through profit and loss | |||
| Translation difference | -29 | 4 | -28 |
| Revaluation of forest land | 2,137 | 211,424 | |
| Comprehensive income for the period total | 102,084 | 107,823 | 753,355 |
| Distribution: | |||
| To shareholders of the parent company | 102,084 | 107,823 | 753,355 |
| Condensed consolidated balance sheet | |||
| EUR thousand | 30 June 2023 | 30 June 2022 | 31 Dec 2022 |
| (unaudited) | (unaudited) | (audited) | |
| ASSETS | |||
| Non-current assets | |||
| Forest assets | 3,219,492 | 2,329,029 | 3,101,049 |
| Biological assets | 2,844,251 | 2,222,936 | 2,737,264 |
| Bare land | 375,242 | 106,093 | 363,785 |
| Other property, plant and equipment | 15,737 | 15,562 | 16,006 |
| Intangible assets | 1,734 | 1,205 | 1,984 |
| Right-of-use assets | 1,820 | 1,944 | 1,911 |
| Derivatives | 43,692 | 36,130 | 42,352 |
| Other investments | 111 | 111 | 111 |
| Non-current receivables | 10,447 | 18,733 | 7,513 |
| Non-current assets total | 3,293,034 | 2,402,713 | 3,170,926 |
| Current assets | |||
| Inventories | 90 | 45 | 92 |
| Accounts receivable and other receivables | 62,139 | 51,078 | 53,061 |
| Investments | 932 | 2,323 | 356 |
| Cash and cash equivalents | 5,604 | 2,836 | 19,244 |
| Current assets total | 68,765 | 56,283 | 72,753 |
| Total assets | 3,361,799 | 2,458,997 | 3,243,679 |
| EQUITY AND LIABILITIES | |||
| Equity attributable to shareholders of the parent company | |||
| Share capital | 50,000 | 50,000 | 50,000 |
| Other equity | 1,943,931 | 1,256,315 | 1,901,847 |
| Total equity | 1,993,931 | 1,306,315 | 1,951,847 |
| Liabilities | |||
| Non-current liabilities | |||
| Deferred tax liabilities | 433,361 | 280,224 | 419,823 |
| Financial liabilities | 799,103 | 748,844 | 749,052 |
| Derivatives | 11,844 | 1,620 | |
| Lease liabilities | 1,578 | 1,720 | 1,644 |
| Other non-current liabilities | 186 | 237 | 186 |
| Non-current liabilities total | 1,234,228 | 1,042,869 | 1,172,325 |
| Current liabilities | |||
| Financial liabilities | 98,351 | 62,858 | 69,016 |
| Accounts payable and other payables | 23,025 | 17,708 | 23,626 |
| Income tax liabilities | 1,646 | 19,824 | 15,188 |
| Lease liabilities | 340 | 303 | 355 |
| Provisions | 10,278 | 9,120 | 11,323 |
| Current liabilities total | 133,640 | 109,813 | 119,508 |
| Total liabilities | 1,367,868 | 1,152,682 | 1,291,833 |
| Total equity and liabilities | 3,361,799 | 2,458,997 | 3,243,679 |
Statement of changes in equity
| EUR thousand | Share capital | Share premium | Translation difference | Revaluation reserve | Retained earnings | Total equity | |
| Equity 1 January 2023 | 50,000 | 29,995 | -10,877 | 211,424 | 1,671,304 | 1,951,847 | |
| Comprehensive income | |||||||
| Profit for the period | 99,976 | 99,976 | |||||
| Other items of comprehensive income (after taxes) | |||||||
| Revaluation of forest land | 2,137 | 2,137 | |||||
| Translation difference | -29 | -29 | |||||
| Comprehensive income for the period | -29 | 2,137 | 99,976 | 102,084 | |||
| Transactions with shareholders | |||||||
| Dividends paid | -60,000 | -60,000 | |||||
| Total transactions with shareholders | -60,000 | -60,000 | |||||
| Equity 30 June 2023 (unaudited) | 50,000 | 29,995 | -10,906 | 213,562 | 1,711,280 | 1,993,931 | |
| Equity 1 January 2022 | 50,000 | 29,995 | -10,849 | 1,189,346 | 1,258,492 | ||
| Comprehensive income | |||||||
| Profit for the period | 107,820 | 107,820 | |||||
| Other items of comprehensive income (after taxes) | |||||||
| Translation difference | 4 | 4 | |||||
| Comprehensive income for the period | 4 | 107,820 | 107,823 | ||||
| Transactions with shareholders | |||||||
| Dividends paid | -60,000 | -60,000 | |||||
| Total transactions with shareholders | -60,000,0 | -60,000,0 | |||||
| Equity 30 June 2022 (unaudited) | 50,000 | 29,995 | -10,845 | 1,237,166 | 1,306,315 | ||
| Equity 1 January 2022 | 50,000 | 29,995 | -10,849 | 1,189,346 | 1,258,492 | ||
| Comprehensive income | |||||||
| Profit for the period | 541,927 | 541,927 | |||||
| Other items of comprehensive income (after taxes) | |||||||
| Revaluation of forest land | 211,424 | 211,424 | |||||
| Other items of comprehensive income (after taxes) | 31 | 31 | |||||
| Translation difference | -28 | -28 | |||||
| Comprehensive income for the period | -28 | 211,424 | 541,958 | 753,355 | |||
| Transactions with shareholders | |||||||
| Dividends paid | -60,000 | -60,000 | |||||
| Total transactions with shareholders | -60,000,0 | -60,000,0 | |||||
| Equity on 31 Dec 2022 | 50,000 | 29,995 | -10,877 | 211,424 | 1,671,304 | 1,951,847 |
| Condensed statement of cash flows | |||
| EUR thousand | 1 Jan - 30 Jun 2023 | 1 Jan - 30 Jun 2022 | 1 Jan – 31 Dec 2022 |
| Cash flow from operating activities | |||
| Cash receipts from transactions in forestry | 72,113 | 46,619 | 140,099 |
| Cash receipts from transactions in land sales | 968 | 3,559 | 5,201 |
| Cash receipts from other operating income | 3,152 | 3,096 | 24,272 |
| Cash paid to suppliers and employees | -28,737 | -23,433 | -49,356 |
| Cash flow from operating activities before financial items and taxes | 47,496 | 29,841 | 120,217 |
| Interest paid, interest-bearing debt | -8,536 | -1,390 | -9,191 |
| Interest received | -142 | -2,628 | -4,405 |
| Other financial expenses | -1,016 | -540 | -798 |
| Interest received | 788 | 113 | 428 |
| Income taxes | -20,783 | -19,602 | -41,294 |
| Cash flow from operating activities | 17,807 | 5,794 | 64,956 |
| Cash flow from investing activities | |||
| Investments in biological assets | -43,872 | -23,674 | -67,094 |
| Investments in tangible assets, forestland | -5,422 | -2,926 | -8,293 |
| Investments in other tangible and intangible assets | -868 | -669 | -3,466 |
| Investments in money market funds | -576 | ||
| Proceeds from sale of unlisted securities | 4,724 | 6,690 | |
| Cash flow from investing activities | -50,738 | -22,545 | -72,162 |
| Cash flow from financing activities | |||
| Withdrawal of long-term loans | |||
| Repayment of long-term loans | -3 | ||
| Withdrawal of short-term loans | 79,485 | 62,961 | 70,000 |
| Repayment of short-term loans | |||
| Repayment of leasing liabilities | -174 | -177 | -343 |
| Dividends paid | -60,000 | -60,000 | -60,000 |
| Cash flow from financing activities | 19,311 | 2,784 | 9,654 |
| Net increase/decrease in cash and cash equivalents | -13,620 | -13,967 | 2,448 |
| Cash and cash equivalents at beginning of period | 19,244 | 16,802 | 16,802 |
| Effect of exchange rate changes on cash and cash equivalents | -21 | 1 | -6 |
| Cash and cash equivalents at end of period | 5,604 | 2,836 | 19,244 |
Attachment
