MANAGEMENT REPORT
Consolidated net sales for Q2 2024 were € 2.18 million, which was a 8% increase compared to the same period last year (Q2 2023: € 2.01 million). The main business area is the production and wholesale of softboard, which recorded sales in Q2 2024 of € 2.17 million (Q2 2023: € 2.00 million). The remaining business area is real estate management of the property owned in Suur-Jõe street in Pärnu, who recorded sales of € 0.01 million in Q2 2024 (Q2 2023: also € 0.01 million).
The reason for the increase in sales revenue of fiberboard (comparing the Q2 2023 to the Q2 2024) is the addition of new industrial customers in 2024. The company's primary focus remains on finding new customers, with the goal of expanding its customer portfolio and discovering new business directions.
The consolidated EBITDA of Nordic Fibreboard AS for Q2 2024 was positive € 217 thousand (Q2 2023: positive € 190 thousand). EBITDA margin was positive 10% in Q2 2024 (Q2 2023: positive 9%). The Group’s gross margin was 25% both in the Q2 2024 and in the Q2 2023.
The consolidated operating profit of Nordic Fibreboard AS for Q2 2024 was € 86 thousand and operating margin was 4%, (Q2 2023: operating profit € 69 thousand and operating margin was 3%).
Group`s consolidated net loss for Q2 2024 was € 23 thousand (Q2 2023: loss € 7 thousand). The net loss for the Q2 2024 included the loss from the revaluation of the shares of Trigon Property Development AS (TPD) owned by Nordic Fibreboard Ltd in the amount of € 56 thousand (Q2 2023, the loss from the revaluation of the TPD shares was € 19 thousand).
DIVISIONAL REVIEW
REVENUE BY BUSINESS SEGMENTS
| € thousand | Q2 2024 | Q2 2023 | 6M 2024 | 6M 2023 |
| Fibreboards production and sales | 2,170 | 1,998 | 4,119 | 4,583 |
| Real Estate Management | 9 | 12 | 21 | 23 |
| TOTAL | 2,179 | 2,010 | 4,140 | 4,606 |
PROFIT BY BUSINESS SEGMENTS
| € thousand | Q2 2024 | Q2 2023 | 6M 2024 | 6M 2023 |
| EBITDA by business units: | ||||
| Fibreboards production and sales | 228 | 212 | 290 | 137 |
| Real Estate Management | (3) | (4) | (15) | (17) |
| Group transactions | (8) | (18) | (5) | (24) |
| TOTAL EBITDA | 217 | 190 | 270 | 96 |
| Extraordinary other operating expenses | 0 | 0 | 0 | (406*) |
| Depreciation | (131) | (121) | (260) | (244) |
| TOTAL OPERATING PROFIT/ LOSS | 86 | 69 | 10 | (554) |
| Net financial costs | (109) | (76) | (106) | (50) |
| NET PROFIT/ LOSS | (23) | (7) | (96) | (604) |
* consists of the one-time loss received from the resale of electricity to the electricity company.
NORDIC FIBREBOARD Ltd: fibreboard productions and sales
Fibreboard sales for Q2 2024 were € 2.17 million (Q2 2023: € 2.00 thousand). The main reason for the increase in sales revenue in the 2nd quarter of 2024 compared to the 2nd quarter of 2023 was the addition of new industrial customers. Sales in Estonia increased by 48% in the second quarter of 2024 compared to the same period last year, and sales to the Finnish market increased by 43%.
In the Q2 2024, there was no sales revenue from a large Danish customer, whose share was 22% of total sales in the same period of 2023. In the Q2 2024, this part of the sales revenue will be compensated by the addition of new industrial customers. The largest of them is located in the Netherlands, followed by Swedish and Polish companies. These new customers accounted for 18% of sales in the first half of 2024
The consolidated EBITDA of Nordic Fibreboard Ltd OÜ for Q2 2024 was positive € 228 thousand (Q2 2023: positive € 212 thousand).
FIBREBOARD SALES BY GEOGRAPHICAL SEGMENTS
| € thousand | Q2 2024 | Q2 2023 | 6M 2024 | 6M 2023 |
| European Union | 2,106 | 1,862 | 3,798 | 4,317 |
| Middle East | 41 | 28 | 57 | 28 |
| Asia | 23 | 23 | 84 | 55 |
| Africa | 0 | 40 | 167 | 93 |
| Other | 0 | 45 | 13 | 90 |
| TOTAL | 2,170 | 1,998 | 4,119 | 4,583 |
PÄRNU RIVERSIDE DEVELOPMENT Oü: real estate management
Pärnu Riverside Development OÜ owns and manages real estate in Pärnu, Suur-Jõe street 48. The company offers commercial premises rental services in one of the property's buildings, the rental income from real estate management was € 9 thousand in Q2 2024, (Q2 2023: € 12 thousand).
The real estate management EBITDA for Q2 2024 were negative € 3 thousand (Q2 2023: negative € 4 thousand).
OUTLOOK
NORDIC FIBREBOARD LTD
The economic outlook for the second half of 2024 has not significantly improved, although regional interest rate reductions may have some positive impact on business operations. However, the effects of these measures are primarily long-term. In the near future, our greatest challenge—and simultaneously our greatest opportunity— is acquiring new clients and markets which we are actively working on. We are still focusing on managing existing markets and key clients, as stability and reliability are becoming increasingly valued in turbulent economic conditions.
On a positive side for Nordic Fibreboard the future trends and outlooks indicate an increasing focus on green and environmentally friendly solutions, both in the construction sector and also in various other industries that Nordic Fibreboard products are already being sold or potentially could be sold. Innovation is key in this process, providing solutions to the clients that meet increasingly stringent environmental regulations and the growing consumer preference for environmentally sustainable products.
As a result of our business analysis and mapping of growth opportunities, Nordic Fibreboard has launched a growth-oriented strategy focused on strategic investments in sales, marketing and development activities to expand our customer base and product line. In the first phase, we will focus on quick and straightforward opportunities to maximize growth potential in the near term. At the same time, we will continue to develop our value proposition to move higher up the value chain for our clients. This will ensure closer partnerships and a broader reach in capturing both current and future business opportunities.
When planning production volumes, we follow the dynamics of sales volumes, ensuring flexibility and quick response to customer orders.
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 residential property.
FINANCIAL HIGHLIGHTS
| Income statement | Q2 2024 | Q2 2023 | 6M 2024 | 6M 2023 |
| Revenue | 2,179 | 2,010 | 4,140 | 4,606 |
| EBITDA | 217 | 190 | 270 | 96 |
| EBITDA margin | 10% | 9% | 7% | 2% |
| Operating profit | 86 | 69 | 10 | (554) |
| Operating margin | 4% | 3% | 0% | (12%) |
| Net profit | (23) | (7) | (96) | (604) |
| Net margin | (1%) | (0%) | (2%) | (13%) |
| Statement of financial position | 30.06.2024 | 31.12.2023 | 30.06.2023 | 31.12.2022 |
| Total assets | 9,252 | 8,505 | 8,856 | 9,408 |
| Return on assets | (1%) | (8%) | (7%) | 13% |
| Equity | 4,306 | 4,402 | 4,480 | 5,084 |
| Return on equity | (2%) | (16%) | (13%) | 24% |
| Debt-to-equity ratio | 53% | 48% | 49% | 46% |
| Share | 30.06.2024 | 31.12.2023 | 30.06.2023 | 31.12.2022 |
| Last Price* | 1.03 | 0.90 | 1.24 | 1.60 |
| Earnings per share | (0.04) | (0.15) | (0.02) | 0.27 |
| Price-earnings ratio | (26.75) | (5.93) | (54.66) | 5.83 |
| Book value of a share | 0.96 | 0.98 | 1.00 | 1.13 |
| Market to book ratio | 1.08 | 0.92 | 1.25 | 1.42 |
| Market capitalization, € thousand | 4 634 | 4 049 | 5 579 | 7 198 |
| Number of shares, piece | 4,499,061 | 4,499,061 | 4,499,061 | 4,499,061 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITIONS
| € thousand | 30.06.2024 | 31.12.2023 | 30.06.2023 | 31.12.2022 |
| Cash and cash equivalents | 2 | 7 | 2 | 2 |
| Receivables and prepayments (Note 2) | 1,084 | 534 | 717 | 559 |
| Inventories (Note 3) | 1,027 | 728 | 930 | 1,672 |
| Total current assets | 2,113 | 1,269 | 1,649 | 2,233 |
| Investment property (Note 4) | 2,294 | 2,269 | 1,859 | 1,859 |
| Financial assets at fair value through profit or loss (Note 7) | 491 | 491 | 698 | 644 |
| Property, plant and equipment (Note 5) | 4,351 | 4,475 | 4,648 | 4,670 |
| Intangible assets (Note 6) | 3 | 1 | 2 | 2 |
| Total non-current assets | 7,139 | 7,236 | 7,207 | 7,175 |
| TOTAL ASSETS | 9,252 | 8,505 | 8,856 | 9,408 |
| Borrowings (Notes 8) | 765 | 556 | 124 | 290 |
| Payables and prepayments (Notes 9) | 1,401 | 756 | 1,094 | 1,014 |
| Short-term provisions (Note 10) | 10 | 21 | 8 | 18 |
| Total current liabilities | 2,176 | 1,333 | 1,226 | 1,322 |
| Long-term borrowings (Notes 8) | 2,659 | 2,659 | 2,884 | 2,875 |
| Long-term payables and prepayments (Notes 9) | 0 | 0 | 139 | 0 |
| Long-term provisions (Note 10) | 111 | 111 | 127 | 127 |
| Total non-current liabilities | 2,770 | 2,770 | 3,150 | 3,002 |
| Total liabilities | 4,946 | 4,103 | 4,376 | 4,324 |
| Share capital (at nominal value) (Note 11) | 450 | 450 | 450 | 450 |
| Statutory reserve capital | 45 | 45 | 45 | 45 |
| Retained earnings (loss) | 3,811 | 3,907 | 3,985 | 4,589 |
| Total equity | 4,306 | 4,402 | 4,480 | 5,084 |
| TOTAL LIABILITIES AND EQUITY | 9,252 | 8,505 | 8,856 | 9,408 |
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
| € thousand | Q2 2024 | Q2 2023 | 6M 2024 | 6M 2023 |
| Revenue (Note 13) | 2,179 | 2,010 | 4,140 | 4,606 |
| Cost of goods sold (Note 14) | 1,755 | 1,629 | 3,468 | 4,064 |
| Gross profit | 424 | 381 | 672 | 542 |
| Distribution costs (Note 15) | 251 | 171 | 477 | 403 |
| Administrative expenses (Note 16) | 94 | 133 | 192 | 273 |
| Other operating income (Note 18) | 8 | 0 | 8 | 0 |
| Other operating expenses (Note 18) | 1 | 8 | 1 | 420 |
| Operating profit (loss) | 86 | 69 | 10 | (554) |
| Finance income (Note 19) | 0 | 0 | 0 | 55 |
| Finance costs (Note 19) | 109 | 76 | 106 | 105 |
| LOSS BEFORE INCOME TAX | (23) | (7) | (96) | (604) |
| NET PROFIT (LOSS) FOR THE PERIOD | (23) | (7) | (96) | (604) |
| Basic earnings per share (Note 12) | (0.01) | (0.00) | (0.02) | (0.13) |
| Diluted earnings per share (Note 12) | (0.01) | (0.00) | (0.02) | (0.13) |
CONSOLIDATED STATEMENT OF CASH FLOW
| € thousand | 6M 2024 | 6M 2023 |
| Cash flows from operating activities | ||
| Operating profit (loss) | 10 | (554) |
| Adjustments: | ||
| Depreciation charge (Notes 5; 6) | 260 | 244 |
| Change in trade and other receivables (Note 2) | (550) | (158) |
| Change in inventories (Note 3) | (299) | 742 |
| Change in trade and other payables (Note 9) | 645 | 219 |
| Change in provisions (Note 10) | (11) | (10) |
| Cash generated from operations | 55 | 483 |
| Interest payments (Note 19) | (106) | (101) |
| Net other financial income and expense | 0 | (4) |
| Net cash generated from operating activities | (51) | 378 |
| Cash flows from investing activities | ||
| Purchase of property, plant and equipment and intangible assets (Notes 5; 6) | (138) | (171) |
| Purchase of real estate investment (Note 4) | (25) | 0 |
| Net cash used in investing activities | (163) | (171) |
| Cash flows from financing activities | ||
| Repayment of loans received (Note 8) | (104) | (306) |
| Loans received from related parties (Note 8) | 0 | 200 |
| Change in overdraft (Note 8) | 324 | (68) |
| Repayment of principal element of lease liability (Note 8) | (11) | (33) |
| Net cash (used in)/from financing activities | 209 | (207) |
| NET CHANGE IN CASH | (5) | 0 |
| OPENING BALANCE OF CASH | 7 | 2 |
| CLOSING BALANCE OF CASH | 2 | 2 |
Enel Äkke
Member of Management Board
+372 55525550
group@nordicfibreboard.com
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