MANAGEMENT REPORT
Consolidated net sales for Q4 2023 were € 1.31 million (Q4 2022: € 2.03 million). The main business area is Nordic Fibreboard Ltd, the production and wholesale of fibreboard, which recorded sales in Q4 2023 of € 1.30 million, (Q4 2022: € 2.02 million). The remaining business area is the management of the property on Suur-Jõe street in Pärnu through the company Pärnu Riverside Development OÜ, whose sales revenue in the 4th quarter of 2023 was €12 thousand (Q4 2022: € 11 thousand).
The decline in Nordic Fibreboard's sales during the fourth quarter of 2023 was primarily influenced by a slowdown in new construction and renovation activities due to the winter season, along with global economic uncertainty affecting both end-users and industrial-oriented business customers. Nordic Fibreboard Ltd had sales of € 1.30 million in Q4 2023, marking a 35% decrease from Q4 2022.
The consolidated EBITDA of Nordic Fibreboard for Q4 2023 was € 245 thousand, the EBITDA margin was 19% (Q4 2022: EBITDA was € 661 thousand and the EBITDA margin was 33%). Compared to the Q4 2022 the Group`s gross margin decreased from 13% to 9% in the Q4 2023.
In Q4 2023, a revaluation of the fair value of real estate investment properties was conducted, relying on expert assessments prepared by an external appraiser, resulting in a profit of 404 thousand euros. (in the Q4 2022, a profit from the revaluation of real estate investments was 697 thousand euros).
Financial expenses for the Q4 2023 were € 237 thousand, of which € 54 thousand were loan interest costs and € 183 thousand were losses from the revaluation of Trigon Property Development (TPD) shares. Total financial income of € 150 thousand was recorded in Q4 2022, which consisted of the dividends received from TPD shares in the amount of € 24 thousand and losses from the revaluation of the same TPD shares in the amount of € 143 thousand and the interest expense of loan obligations in the amount of € 31 thousand.
Group`s consolidated net loss for Q4 2023 was € 115 thousand (Q4 2022: profit € 386 thousand).
DIVISIONAL REVIEW
Revenue by business segments
| € thousand | Q4 2023 | Q4 2022 | 12M 2023 | 12M 2022 |
| Fibreboards production and sales | 1,300 | 2,020 | 7,657 | 11,035 |
| Real Estate Management | 12 | 11 | 47 | 39 |
| TOTAL | 1,312 | 2,031 | 7,704 | 11,074 |
Profit by business segments
| € thousand | Q4 2023 | Q4 2022 | 12M 2023 | 12M 2022 |
| EBITDA by business units: | ||||
| Fibreboards production and sales | 127 | (23) | 510 | 1,092 |
| Real Estate Management | 132 | 690 | 113 | 672 |
| Group transactions | (14) | (6) | (44) | (32) |
| TOTAL EBITDA | 245 | 661 | 579 | 1,732 |
| Extraordinary other operating expenses | 0 | 0 | (406) | 0 |
| Depreciation | (123) | (125) | (489) | (497) |
| TOTAL OPERATING PROFIT/ LOSS | 122 | 536 | (316) | 1,235 |
| Net financial costs | (237) | (150) | (366) | (1) |
| NET PROFIT/ LOSS | (115) | 386 | (682) | 1,234 |
NORDIC FIBREBOARD LTD: fibreboard production and sales
Fibreboard sales in Q4 2023 were € 1.30 million (Q4 2022: € 2.02 million). In Q4 2023, the main reason behind the decrease in sales revenue compared to Q4 2022 was the termination of the agreement with the primary customer in Denmark, which led to a decrease in sales by 24% compared to Q4 2022. In addition, sales in Finland decreased by 23% and sales in Latvia decreased by 47% in Q4 2023 compared to the same period in 2022. As a positive development, the company has successfully reestablished cooperation with former export customers and has also secured new customers in both the Middle East and the European Union. As a result, in Q4 2023 compared to Q4 2022, sales in Sweden have increased by 41%, and sales in Africa and Asia have recovered.
The EBITDA of the fiberboard segment for the Q4 2023 was a positive € 127 thousand, which is a quarterly improvement compared to the EBITDA for the Q4 2022, which was a negative € 23 thousand, but when comparing EBITDA for the twelve months of 2023 with the 2022 with the same period, the drop is 53%. The main reason for the decline can be attributed to the exceptionally high electricity prices in early 2023, which had a significant impact on the company. The situation was alleviated by the implementation of a new electricity contract in April 2023, which provided more favorable terms for purchasing electricity.
Fibreboard sales by geographical segments
| € thousand | € thousand | |||
| Q4 2023 | Q4 2022 | 12M 2023 | 12M 2022 | |
| European Union | 1,120 | 1,871 | 6,974 | 10,297 |
| Africa | 64 | 0 | 197 | 0 |
| Middle East | 41 | 82 | 137 | 154 |
| Asia | 11 | 0 | 113 | 69 |
| Russia | 0 | 0 | 0 | 427 |
| Other | 64 | 67 | 236 | 88 |
| TOTAL | 1,300 | 2,020 | 7,657 | 11,035 |
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 € 12 thousand in Q4 2023, (Q4 2022: € 11 thousand).
The real estate management EBITDA for Q4 2023 were positive € 132 thousand (Q4 2022: EBITDA was positive € 690 thousand). As of the end of 2023 and 2022, fair value revaluations of the real estate investment object located at 48 Suur-Jõe Street in Pärnu was conducted, resulting in an income of € 142 thousand in the Q4 2023 and the income of the Q4 2022 was € 697 thousand.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AND CASH FLOW STATEMENT
As of 31.12.2023 the total assets of Nordic Fibreboard AS were € 8.5 million (31.12.2022: 9.4 million). The liabilities of the company as of 31.12.2023 were € 4.2 million (31.12.2022: € 4.3 million), of which the Group has payables of € 0.5 million as at 31.012.2023 (31.12.2022: € 0.5 million) and borrowings of € 3.2 million as at 31.12.2023 (31.12.2022: also € 3.2 million).
Receivables and prepayments amounted to € 0.5 million as at 31.12.2023 (31.12.2022: € 0.6 million). Inventories were € 0.7 million as of 31.12.2023 (31.12.2022: € 1.7 million). Fixed assets were € 7.2 million as of 31.12.2023 (€ 7.2 million as of 31.12.2022).
During 2023 twelve months, the Group’s cash flows from operating activities totalled € 266 thousand (2022 twelve months: € 152 thousand). Cash outflows due to investment activities was € 257 thousand during 2023 twelve months, mainly consisting of investments into production assets of € 251 thousand and real estate investments of € 6 thousand (2022 twelve months: cash outflow € 129 thousand). Financing activities also resulted in cash outflows of € 4 thousand during 2023 twelve months (2022 twelve months: cash outflow € 78 thousand). Net cash effect during 2023 twelve months cash inflow of € 7 thousand, (2021 twelve months: cash outflow € 55 thousand).
OUTLOOK
Nordic Fibreboard Ltd
The building materials market is experiencing modest demand overall, with an uncertain short-term outlook. Operating in such a challenging market environment, forecasting future trends is difficult, and market stability is elusive. High interest rates, ongoing economic uncertainty, and international tensions are influencing the purchasing decisions and business plans of both consumers and businesses. These factors have led to a slowdown in the construction and renovation market, affecting both consumers and businesses.
However, there are signs of customer interest recovery in certain markets, and the company has secured agreements with some new customers, providing hope for some recovery of sales volume. Currently, the company's primary focus is on finding new customers to expand its customer portfolio.
Meanwhile, the company continues to actively contribute to product development to ensure the sustainability of its operations and growth in the market.
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.
FINANTSIAL HIGHLIGHTS
| € thousand | ||||
| Income statement | Q4 2023 | Q4 2022 | 12M 2023 | 12M 2022 |
| Revenue | 1,312 | 2,031 | 7,704 | 11,074 |
| EBITDA | 245 | 661 | 579 | 1,732 |
| EBITDA margin | 19% | 33% | 8% | 16% |
| Operating profit | 122 | 536 | (316) | 1,235 |
| Operating margin | 9% | 26% | (4%) | 11% |
| Net profit | (115) | 386 | (682) | 1,234 |
| Net margin | (9%) | 19% | (9%) | 11% |
| Statement of financial position | 31.12.2023 | 31.12.2022 |
| Total assets | 8,505 | 9,408 |
| Return on assets | (8%) | 13% |
| Equity | 4,402 | 5,084 |
| Return on equity | (16%) | 24% |
| Debt-to-equity ratio | 48% | 46% |
| Share | 31.12.2023 | 31.12.2022 |
| Last Price (€)* | 0.90 | 1.60 |
| Earnings per share (€) | (0.15) | 0.27 |
| Price-earnings ratio | (5.93) | 5.83 |
| Book value of a share (€) | 0.98 | 1.13 |
| Market to book ratio | 0.92 | 1.42 |
| Market capitalization, € thousand | 4,049 | 7,198 |
| Number of shares, piece | 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/
CONSOLIDATED STATEMENT OF FINANCIAL POSITIONS
| € thousand | 31.12.2023 | 31.12.2022 | 31.12.2021 |
| Cash and cash equivalents | 7 | 2 | 57 |
| Receivables and prepayments (Note 2) | 534 | 559 | 902 |
| Inventories (Note 3) | 728 | 1,672 | 390 |
| Total current assets | 1,269 | 2,233 | 1,349 |
| Investment property (Note 4) | 2,269 | 1,859 | 1,152 |
| Financial assets at fair value through profit or loss (Note 7) | 491 | 644 | 644 |
| Property, plant, equipment and right-of-use assets (Note 5) | 4,475 | 4,670 | 4,915 |
| Intangible assets (Note 6) | 1 | 2 | 3 |
| Total non-current assets | 7,236 | 7,175 | 6,714 |
| TOTAL ASSETS | 8,505 | 9,408 | 8,063 |
| Borrowings (Notes 8) | 756 | 290 | 146 |
| Payables and prepayments (Notes 9) | 756 | 1,014 | 829 |
| Short-term provisions (Note 10) | 21 | 18 | 19 |
| Total current liabilities | 1,533 | 1,322 | 994 |
| Long-term borrowings (Notes 8) | 2,459 | 2,875 | 3,074 |
| Long-term provisions (Note 10) | 111 | 127 | 145 |
| Total non-current liabilities | 2,570 | 3,002 | 3,219 |
| Total liabilities | 4,103 | 4,324 | 4,213 |
| Share capital (at nominal value) (Note 11) | 450 | 450 | 450 |
| Statutory reserve capital | 45 | 45 | 0 |
| Retained earnings (loss) | 3,907 | 4,589 | 3,400 |
| Total equity | 4,402 | 5,084 | 3,850 |
| TOTAL LIABILITIES AND EQUITY | 8,505 | 9,408 | 8,063 |
*The notes to the financial statements presented on pages 15 to 26 are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
| € thousand | Q4 2023 | Q4 2022 | 12M 2023 | 12M 2022 |
| Revenue (Note 13) | 1,312 | 2,031 | 7,704 | 11,074 |
| Cost of goods sold (Note 14) | 1,313 | 1,890 | 6,810 | 9,024 |
| Gross profit | (1) | 141 | 894 | 2,050 |
| Distribution costs (Note 15) | 137 | 193 | 673 | 1,112 |
| Administrative expenses (Note 16) | 141 | 109 | 514 | 424 |
| Other operating income (Note 18) | 404 | 697 | 404 | 730 |
| Other operating expenses (Note 18) | 3 | 0 | 427 | 9 |
| Operating profit (loss) | 122 | 536 | (316) | 1,235 |
| Finance income (Note 19) | 0 | 24 | 0 | 129 |
| Finance costs (Note 19) | 237 | 174 | 366 | 130 |
| PROFIT (LOSS) BEFORE INCOME TAX | (115) | 386 | (682) | 1,234 |
| NET PROFIT (LOSS) FOR THE PERIOD | (115) | 386 | (682) | 1,234 |
| Basic earnings per share (Note 12) | (0.03) | 0.09 | (0.15) | 0.27 |
| Diluted earnings per share (Note 12) | (0.03) | 0.09 | (0.15) | 0.27 |
*The notes to the financial statements presented on pages 15 to 26 are an integral part of these consolidated financial statements.
Enel Äkke
Member of Management Board
+372 55525550
group@nordicfibreboard.com
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