Koskisen’s profitability at a good level in a challenging operating environment – Performance of the Panel Industry segment continued to be strong

Koskisen's profitability at a good level in a challenging operating environment – Performance of the Panel Industry segment continued to be strong

This release is a summary of Koskisen Corporation’s Financial Statements Release January–December 2023. The complete Financial Statements Release is attached, and also available on the company’s website at koskisen.com/investors.

October–December 2023 in brief
· Revenue decreased and amounted to EUR 68.7 (77.4) million.
· EBITDA decreased and amounted to EUR 5.3 (9.8) million.
· EBITDA margin was 7.6 per cent (12.7).
· Adjusted EBITDA amounted to EUR 5.5 (10.7) million.
· Adjusted EBITDA margin was 8.0 per cent (13.8).
· Operating profit amounted to EUR 3.0 (7.8) million and was 4.4 (10.1) per cent of revenue.
· The profit for the financial period amounted to EUR 2.6 (5.0) million.
· Basic earnings per share were EUR 0.11 (0.26).

January–December 2023 in brief
· Revenue decreased and amounted to EUR 271.3 (317.7) million.
· EBITDA decreased and amounted to EUR 33.0 (66.3) million.
· EBITDA margin was 12.2 per cent (20.9).
· Adjusted EBITDA amounted to EUR 33.1 (66.6) million.
· Adjusted EBITDA margin was 12.2 per cent (21.0).
· Operating profit amounted to EUR 24.4 (58.2) million and was 9.0 (18.3) per cent of revenue.
· The profit for the financial period amounted to EUR 20.2 (46.0) million.
· Basic earnings per share were EUR 0.88 (2.48).

Dividend proposal
The Board of Directors proposes to the Annual General Meeting to be held in spring 2024 that dividend of EUR 0.32 per share be paid.

Profit guidance for 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	10–12 2023	10–12 2022	Change, %	1–12 2023	1–12 2022	Change, %
Revenue	68.7	77.4	-11.3	271.3	317.7	-14.6
EBITDA	5.3	9.8	-46.5	33.0	66.3	-50.2
EBITDA margin, %	7.6	12.7		12.2	20.9
Adjusted EBITDA	5.5	10.7	-48.9	33.1	66.6	-50.2
Adjusted EBITDA margin, %	8.0	13.8		12.2	21.0
Operating profit (EBIT)	3.0	7.8	-61.9	24.4	58.2	-58.1
Operating profit (EBIT) margin, %	4.4	10.1		9.0	18.3
Profit for the period	2.6	5.0	-48.6	20.2	46.0	-56.0
Basic earnings per share, EUR	0.11	0.26		0.88	2.48
Diluted earnings per share, EUR	0.11	0.25		0.87	2.47
Gross investments	12.7	5.4		31.7	26.6
Equity per share, EUR				6.4	5.9
Return on capital employed (ROCE), %				12.1	35.7
Working capital, end of period				37.9	28.9
Net cash flow from operating activities				14.9	47.2
Equity ratio, %				54.8	52.7
Gearing, %				-1.8	-21.0

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

CEO Jukka Pahta:
Uncertainty in the operating environment continued in the last quarter of the year. In particular, the weak construction cycle affected market sentiment, demand and price formation extensively in the company’s various markets.

As expected, Koskisen Group’s fourth-quarter profitability weakened from the comparison period, with adjusted EBITDA amounting to EUR 5.5 (10.7) million. The adjusted EBITDA margin was 8.0 (13.8) per cent. The full-year adjusted EBITDA was EUR 33.1 million (EUR 66.6 million) and the adjusted EBITDA margin was EUR 12.2 million (EUR 21.0 million). Although the full-year profit level was lower than in the previous record year, the performance can be considered good in a difficult market situation.

Profitability of the Sawn Timber Industry segment decreased year-on-year, with EBITDA amounting to EUR 1.0 (2.6) million. The commissioning of the new saw line continued. We fell a little behind the desired production target, and the shortfall was partially patched with the old sawmill. The lower-than-targeted production volumes were also affected by cold weather, which challenged the smoothness of production, as well as the reduced productivity of the old saw line. The profitability of the Sawn Timber Industry segment was also still burdened by the continued high price of the raw material.

The old sawmill was closed as planned before Christmas, and the production of sawn timber is now centralised to the new line in Järvelä. If necessary, we will use a third shift instead of the normal two to achieve the targeted production volumes. We are working diligently to optimise the saw line and achieve full capacity. Achieving the targeted capacity will significantly improve the productivity and profitability of the Sawn Timber Industry segment – approximately EUR 8 million annually.

The development of the Sawn Timber Industry segment continues with the construction of a log yard in the immediate vicinity of the new sawmill. Once completed in early 2025, the new log yard will significantly increase the efficiency of the sawing process, reduce the volume of internal logistics and thus both provide cost savings and reduce the carbon dioxide emissions from operations. The channel dryer under construction, in turn, will open the bottlenecks of production in the late phases of the process; with the volume growth of the saw line, it is also necessary to increase the drying capacity.

The price of sawn timber continued to decrease as expected compared to the previous quarter. The price level of sawn timber products, on the other hand, was slightly better than predicted. The Finnish sawmill industry’s stocks of sawn timber were at a very low level at the turn of the year, as were stock levels at Koskisen. Despite the weak situation in the construction industry, we expect an increase in sales volumes for the current year, as well as a small increase in the price of sawn timber.

Profitability of the Panel Industry segment decreased year-on-year, with EBITDA amounting to EUR 4.7 (9.4) million. The downward trend in construction was particularly evident in the occasional low order book in chipboard. This has been reacted to as necessary through flexibility in working time, such as with temporary lay-offs. The demand for birch plywood remained at a good level until the quieter season towards the end of the year, when customers optimise their year-end inventories. There is still a supply shortage in the market, so we expect the demand for birch plywood to remain good. The continuing weak cycle of construction, in turn, is slowing down the recovery of the demand for chipboard.

In the Panel Industry segment, a lathe investment enhancing material efficiency was commissioned as planned in December. It enables the use of smaller log classes as well as increasing the efficiency of raw material use. The solar power plant completed in Järvelä was commissioned at the end of December, and it is ready to produce an increasing amount of emission-free electricity for plywood and chipboard plants as the sunlight gradually increases. We will continue to develop the production of the Panel industry segment with several smaller investments also in 2024.

The raw material sourcing for the production plants has gone according to plans and the raw material reserves and inventories have been at a good level. The decrease in the prices of softwood logs levelled off compared to the previous quarter and the prices remained at a high level, considering the economic cycle. The availability of birch raw material continued to be limited. Despite this, raw material supply for the needs of the Panel Industry segment has been successful, and the shortage has not affected the planned production of birch plywood.

Webcast
A webcast (in Finnish) in relation to January-December 2023 Financial Statements Release will be held today on 16 February 2024 at 10:00 a.m. EET. 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. At the same time, we bring the best carbon narrative to life: We manufacture high-quality and sustainable products that store carbon for decades. The Group’s revenue in 2023 was EUR 271 million. Read more: koskisen.com