Koskisen’s profit level was satisfactory considering the circumstances – profitability was negatively affected by the high price of wood raw material

Koskisen’s profit level was satisfactory considering the circumstances – profitability was negatively affected by the high price of wood raw material

This release is a summary of Koskisen Corporation’s January–June 2024 Half-Year report. The complete Interim Report is attached, and also available on the company’s website at koskisen.com/investors.

April–June 2024 in brief
· Revenue increased and amounted to EUR 77.8 (73.9) million.
· EBITDA decreased and amounted to EUR 9.4 (13.8) million.
· The EBITDA margin was 12.0 per cent (18.6).
· Adjusted EBITDA amounted to EUR 9.3 (13.7) million.
· The adjusted EBITDA margin was 12.0 per cent (18.5).
· Operating profit amounted to EUR 6.9 (11.7) million, representing 8.9 per cent (15.9) of revenue.
· The profit for the financial period amounted to EUR 4.9 (9.8) million.
· Basic earnings per share were EUR 0.21 (0.43).

January–June 2024 in brief
· Revenue decreased and amounted to EUR 141.5 (147.1) million.
· EBITDA decreased and amounted to EUR 14.9 (26.4) million.
· The EBITDA margin was 10.5 per cent (18.0).
· Adjusted EBITDA amounted to EUR 14.9 (26.3) million.
· The adjusted EBITDA margin was 10.5 per cent (17.9).
· Operating profit amounted to EUR 10.0 (22.4) million, representing 7.1 (15.2) per cent of revenue.
· The profit for the financial period amounted to EUR 7.2 (18.6) million.
· Basic earnings per share were EUR 0.31 (0.81).

The figures in brackets refer to the comparison period, i.e. the corresponding period in the previous year, unless specified otherwise.

Profit guidance for 2024 unchanged (published on 16 February 2024)
Koskisen Group’s revenue for 2024 is expected to grow from the level of 2023. The adjusted EBITDA margin is expected to be 8–12 per cent.

Key figures

EUR million	4–6 2024	4–6 2023	Change, %	1–6 2024	1–6 2023	Change, %	1–12 2023
Revenue	77.8	73.9	5.3	141.5	147.1	-3.8	271.3
EBITDA	9.4	13.8	-32.0	14.9	26.4	-43.5	33.0
EBITDA margin, %	12.0	18.6		10.5	18.0		12.2
Adjusted EBITDA	9.3	13.7	-31.8	14.9	26.3	-43.5	33.1
Adjusted EBITDA margin, %	12.0	18.5		10.5	17.9		12.2
Operating profit (EBIT)	6.9	11.7	-41.1	10.0	22.4	-55.1	24.4
Operating profit (EBIT) margin, %	8.9	15.9		7.1	15.2		9.0
Profit for the period	4.9	9.8	-49.8	7.2	18.6	-61.4	20.2
Basic earnings per share, EUR	0.21	0.43		0.31	0.81		0.88
Diluted earnings per share, EUR	0.21	0.42		0.31	0.80		0.87
Gross investments	5.4	6.2		9.9	14.9		32.1
Equity per share, EUR				6.4	6.3		6.4
Return on capital employed (ROCE), %				5.8	22.2		12.1
Working capital, end of period				44.4	39.7		37.9
Net cash flow from operating activities				8.6	6.5		14.9
Equity ratio, %				53.3	57.4		54.8
Gearing, %				8.8	-8.1		-1.8

CEO Jukka Pahta:
Koskisen Group’s second-quarter profitability weakened year-on-year, with adjusted EBITDA amounting to EUR 9.3 (13.7) million. The achieved level of profitability can be considered satisfactory given the challenging operating environment and the high cost level. The adjusted EBITDA margin was 12.0 per cent (18.5). As summer approached, demand remained stable and there was a slight uptick in the market, particularly with regard to sawn timber. Nevertheless, uncertainty continued and, in particular, the recovery of the construction sector has been slower than expected.

The profitability of the Sawn Timber Industry segment decreased slightly year-on-year, with EBITDA amounting to EUR 1.6 (1.7) million. Profitability was weakened by the continued high raw material prices and the slower-than-anticipated ramp-up of the new sawmill.

The world market prices of sawn timber increased slightly when compared to the previous quarter, but they are still at a low level when compared to the historically high costs of the wood raw material used. Inventory levels in industry and the supply chain increased as a result of industrial action that took place in the early part of the year. The reduction of these accumulated inventories continued in the second quarter. Deliveries postponed due to the industrial action were made in June at the latest, which increased revenue in the second quarter.

In wood sourcing, raw material reserves and inventories were at a good level, and raw material supply was in line with plans. Demand for pulpwood and wood chips remained strong, while the demand for energy fractions was tempered by the end of the heating season.

Progress was made on the ramp-up of the new sawmill, and we achieved the production target set for the quarter. Shift-specific efficiency levels were still below target. We expect that the targeted production level, corresponding to an annual output of 400,000 m3, will be achieved by the end of the third quarter.

Development investments in the Sawn Timber Industry segment progressed according to plan. The new channel dryer related to the expansion of sawmill capacity was commissioned at the end of the second quarter. The construction of the new log yard progressed according to plan. The log yard and its related functions are expected to be completed at the beginning of 2025. The Sawn Timber Industry segment’s functions will then be located in one place, making it possible to develop the new sawmill into one of Finland’s most competitive production facilities of its kind. The new log yard will significantly reduce transport costs related to internal logistics and the associated emissions, for example.

The profitability of the Panel Industry segment decreased year-on-year, with EBITDA amounting to EUR 8.1 (12.2) million. The EBITDA margin was 19.6 (27.6) per cent. Profitability was weakened by a slight reduction in volumes. The market situation for plywood remained strong and the price level remained unchanged in the second quarter. For chipboard products, which are more dependent on the demand for construction, demand has remained below the normal level. Production was scaled back as necessary.

We decided to invest approximately EUR 3 million in the Kore business, which produces interior solutions for light commercial vehicles and is part of the Panel Industry segment. The investment is allocated to a new production unit to be established in Skwierzyna, Poland. The new facilities will make it possible to scale up production capacity to more than double the current level. The investment supports the expansion of the product range in the Kore business to new end-uses and the growth of the current market area. Expanding the Kore business is one of the growth paths of our recently updated strategy. The aim is to achieve profitable growth for Kore through new products and customer relationships.

Koskisen specified its strategic growth paths and related measures for the strategy period 2024–2027. The strategic priorities are to create value for customers, develop the existing operations and take bold steps forward. The financial targets previously set by Koskisen until the end of 2027 remain unchanged. As part of the strategy process, we set targets and indicators for the material sustainability topics. Monitoring the targets and indicators will support the goal-driven development of our operations in an increasingly sustainable direction. Koskinen's comprehensive sustainability programme was published at the end of June. Our products, which are made from renewable raw materials and bind carbon for a long time, play a significant role in the green transition, which creates growing demand for renewable materials.

Webcast
A webcast (in Finnish) in relation to January-June 2024 Half-Year report will be held today on 16 August 2024 at 10:00 a.m. EEST. The webcast can be followed at koskisen.com/webcasts. The presentation material and a recording of the webcast will be available on the company’s website afterwards.

For further information, please contact:
Jukka Pahta, CEO, Koskisen Corporation
jukka.pahta@koskisen.com
puh. +358 20 553 4561

Media enquires:
Sanna Väisänen, Director, Sustainability and Communications, Koskisen Corporation
sanna.vaisanen@koskisen.com
puh. +358 20 553 4563

Koskisen is an international wood processing specialist with more than a century of experience and known for its agility and ability to listen to the customer. We utilise our valuable wood raw material as thoroughly as possible, up to the last particle of sawdust. We manufacture high-quality and sustainable circular bioeconomy products that store carbon for decades. The Group’s revenue in 2023 was EUR 271 million. Read more: koskisen.com