Koskisen Corporation stock exchange release, May 24, 2023, at 08:30 a.m. EEST
Koskisen’s profitability was at a good level considering the market situation – the Panel Industry business segment recorded a strong result
This release is a summary of Koskisen Corporation’s Interim Report January-March 2023. The complete Interim Report is attached, and also available on the company’s website at koskisen.com/investors.
January-March 2023 in brief
• Revenue decreased to EUR 73.2 (78.8) million.
• EBITDA decreased to EUR 12.6 (16.0) million.
• The EBITDA margin was 17.3 (20.4) per cent.
• Adjusted EBITDA amounted to EUR 12.6 (16.2) million.
• The adjusted EBITDA margin was 17.3 (20.5) per cent.
• Operating profit amounted to EUR 10.7 (14.0) million and was 14.6 (17.8) per cent of revenue.
• The profit for the financial period amounted to EUR 8.8 (12.1) million.
• Basic earnings per share were EUR 0.38 (0.69).
• Diluted earnings per share were EUR 0.38 (0.69).
Profit guidance for 2023 unchanged (published on 16 March 2023)
Koskisen’s revenue for 2023 is not expected to exceed the level of 2022. The adjusted EBITDA margin is expected to be 12–14 per cent.
The profitability of the Sawn Timber Industry segment is expected to decrease compared to the level of 2022. The profitability of the Panel Industry segment is expected to remain unchanged or improve compared to the level of 2022.
|EBITDA margin, %||17.3||20.4||20.9|
|Adjusted EBITDA margin, %||17.3||20.5||21.0|
|Operating profit (EBIT)||10.7||14.0||-23.8||58.2|
|Operating profit (EBIT margin), %||14.6||17.8||18.3|
|Profit for the period||8.8||12.1||-27.1||46.0|
|Basic earnings per share, EUR||0.38||0.69||2.48|
|Diluted earnings per share, EUR||0.38||0.69||2.47|
|Equity per share, EUR||6.3||5.6||5.9|
|Return on capital employed (ROCE), %||32.1||N/A||35.7|
|Working capital, end of period||46.8||50.9||28.9|
|Net cash flow from operating activities||-8.0||-5.3||47.2|
|Equity ratio, %||55.4||34.7||52.7|
The figures in brackets refer to the comparison period, i.e. the corresponding period the previous year, unless specified otherwise.
CEO Jukka Pahta:
Considering the market situation, Koskisen had a good first quarter, although profitability was lower than in the comparison period. The adjusted EBITDA of EUR 12.6 million for January–March can be seen as a success. The first quarter of the year was also stronger than the final quarter of 2022. All in all, profit performance was in line with expectations: the improved profitability of the Panel Industry business segment compensated for the weakened result of the Sawn Timber business segment.
The revenue of the Sawn Timber segment declined year-on-year, mainly due to a decrease in prices caused by the global market situation. The sawn timber market remains uncertain and unpredictable, particularly with regard to the latter part of the year. The price development of sawn timber was in line with expectations in the first quarter, with the prices of processed sawn timber products being slightly lower than previously predicted. On the whole, production went as planned: while inventories increased slightly from the turn of the year, they ended up at the normal level, in line with the level of the corresponding period in the previous year.
The company continued to resolutely implement its strategy. Construction on the new wood processing unit is progressing according to plan and within the cost budget. The target remains to have the unit become operational in July 2023, followed by a gradual ramp-up of production in the second half of the year. The unit is expected to operate at full capacity in early 2024. The new unit will significantly improve the productivity of the Sawn Timber segment from the beginning of next year.
In the Panel Industry segment, the demand for birch plywood remained strong. This was reflected in the favourable development of selling prices. Birch plywood has a broader range of end uses than other products, which supports strong demand in spite of the increased economic uncertainty. The EU’s sanctions against Russia also affect the supply of birch plywood on the market by significantly reducing supply. Production volumes were slightly lower than in the comparison period and inventory levels remained low. The production and sales of chipboard were well-balanced, although the production volume was lower than in the comparison period. The Kore business picked up in the first quarter, driven by the general recovery of the vehicle industry.
As the weakened demand in the construction sector has a direct impact on the profitability of the Sawn Timber segment, the Panel Industry segment plays an important role in softening the market impacts from the Group’s perspective. Indeed, the effect of the Panel Industry segment is clearly apparent in the figures for the first quarter: good demand has enabled the favourable development of the average prices of products and, at the same time, Koskisen’s own sales organisation has done an excellent job of optimising product-specific and customer-specific profitability.
Trading activity in the wood market was high and the harvest conditions were good. The price of logs used as raw material remained at a high level. Demand for pulpwood and wood chips was strong, with prices rising for both pulping industry raw materials and fuels used in energy production. The procurement of birch logs has gone according to plan, and raw material inventories have been accumulated to ensure the smooth resumption of production after the maintenance shutdown scheduled for the summer.
We will continue our systematic efforts to develop sustainable and innovative wood products. SENSi, the sensor-equipped smart floor panel developed by Koskisen, placed third in public voting in the New Wood innovation competition. Koskisen SENSi is a smart floor panel designed to be used in transport equipment flooring. It optimises the use of cargo space by providing data that is shared via a cloud-based platform. SENSi panels are made from Finnish birch plywood. In the competition, SENSi was recognised as an important innovation for reducing climate impacts and transportation costs, as well as improving safety. SENSi panels are currently in the product development and testing phase in collaboration with selected partners.
A webcast (in Finnish) in relation to Interim Report January-March 2023 will be held today on 24 May 2023 at 10:00 a.m. 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
tel. +358 20 553 4561
Sanna Väisänen, Director, Sustainability and Communications, Koskisen Corporation
tel. +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 2022 was EUR 318 million. Read more: koskisen.com