Koskisen Corporation stock exchange release, August 25, 2023, at 08:30 a.m. EEST
Koskisen’s profitability was good considering the market situation – the Panel Industry business segment continued its strong profit performance
This release is a summary of Koskisen Corporation’s Half-Year Report January-June 2023. The complete Half-Year Report is attached, and also available on the company’s website at koskisen.com/investors.
April–June 2023 in brief
· Revenue decreased to EUR 73.9 (94.0) million.
· EBITDA decreased to EUR 13.8 (30.1) million.
· The EBITDA margin was 18.6 (32.0) per cent.
· Adjusted EBITDA amounted to EUR 13.7 (28.1) million.
· The adjusted EBITDA margin was 18.5 (29.9) per cent.
· Operating profit amounted to EUR 11.7 (28.0) million and was 15.9 (29.8) per cent of revenue.
· The profit for the financial period amounted to EUR 9.8 (21.8) million.
· Basic earnings per share were EUR 0.43 (1.86).
· Diluted earnings per share were EUR 0.42 (1.86).
January–June 2023 in brief
· Revenue decreased to EUR 147.1 (172.8) million.
· EBITDA decreased to EUR 26.4 (46.1) million.
· The EBITDA margin was 18.0 (26.7) per cent.
· Adjusted EBITDA amounted to EUR 26.3 (44.3) million.
· The adjusted EBITDA margin was 17.9 (25.6) per cent.
· Operating profit amounted to EUR 22.4 (42.0) million and was 15.2 (24.3) per cent of revenue.
· The profit for the financial period amounted to EUR 18.6 (33.8) million.
· Basic earnings per share were EUR 0.81 (3.36).
· Diluted earnings per share were EUR 0.80 (3.36).
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.
|1–6 2023||1–6 2022||Change, %||1–12
|EBITDA margin, %||18.6||32.0||18.0||26.7||20.9|
|Adjusted EBITDA margin, %||18.5||29.9||17.9||25.6||21.0|
|Operating profit (EBIT)||11.7||28.0||-58.2||22.4||42.0||-46.7||58.2|
|Operating profit (EBIT) margin, %||15.9||29.8||15.2||24.3||18.3|
|Profit for the period||9.8||21.8||-54.9||18.6||33.8||-45.0||46.0|
|Basic earnings per share, EUR||0.43||1.86||0.81||3.36||2.48|
|Diluted earnings per share, EUR||0.42||1.86||0.80||3.36||2.47|
|Equity per share, EUR||6.3||5.3||5.9|
|Return on capital employed (ROCE), %||22.2||N/A||35.7|
|Working capital, end of period||39.7||46.7||28.9|
|Net cash flow from operating activities||6.5||15.6||47.2|
|Equity ratio, %||57.4||45.6||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:
In spite of the subdued market conditions, the second quarter of the year was a good period for Koskisen, as the Group’s profit performance remained largely unchanged from the first months of the year. Although profitability declined compared to the record-breaking reference period, with adjusted EBITDA amounting to EUR 13.7 (28.1) million, it improved slightly from the first quarter of the year. The adjusted EBITDA margin in the second quarter was 18.5% (29.9%).
Uncertainty in the operating environment continues, particularly in the construction sector, which naturally has an effect on demand. In spite of the challenging market conditions, the sales of the wood products manufactured by Koskisen have been good and in line with plans.
We can be very satisfied with the performance of the Panel Industry segment in the second quarter. Profitability improved in all product categories as the segment achieved an EBITDA of EUR 12.2 (8.4) million. The production of panel products has gone according to plan, and demand has been strong, particularly for plywood products.
In the Panel Industry segment, installation work on the new veneer peeling line began slightly ahead of schedule. The aim is to deploy the new veneer peeling line in the latter part of the year. It will improve the efficiency of wood use at the plywood mill and upgrade the manufacturing process. The Panel Industry segment has begun preparations for starting the commercial scale production of Zero, a completely wood-based furniture board, during the second half of the year. Interest in the world’s first completely wood-based furniture board has remained high.
The profitability of the Sawn Timber Industry segment was at a weak level, but it can be considered satisfactory in light of the current situation in the industry. Sawn timber production has been maintained at the normal level, and there was no reason to limit production in the second quarter either. Inventory levels have remained moderate due to active sales efforts. While the sales prices agreed for the second quarter initially showed a rising trend, they subsequently turned to a decline and began approaching the levels seen in the first quarter.
The start-up of the new sawmill took place at the beginning of July, as planned. The project was completed on schedule and on budget, which is an excellent achievement in the current operating environment of high inflation. The new sawmill will significantly improve the productivity of the Sawn Timber Industry segment from the beginning of next year: it will present opportunities for improving production efficiency and expanding the sawn timber market through the introduction of new products.
As decided in august, we will continue to develop sawn timber production by building a new log yard at the sawmill, complete with related functions. The investment of approximately EUR 15 million will provide significant support for the Sawn Timber Industry segment’s growth strategy and make it possible to develop the new sawmill into Finland’s most competitive production facility of its kind. The new functions include state-of-the-art measurement technology and increased sorting capacity, which will further improve the qualitative and quantitative yield of raw material. The investment also significantly reduces CO2 emissions related to the company's internal logistics. The construction of the previously announced new channel dryer also started in July as part of the segment’s growth strategy.
Koskisen’s wood procurement has gone according to plan despite the continued tight market situation. The price of softwood logs is high relative to the market situation, which is a challenge for the Sawn Timber Industry segment. In spite of the weakened situation in the sawn timber market, the prices of softwood logs have been rising in Finland, unlike in the key competitor countries. With regard to wood harvesting and transport costs, the sharpest rise in prices has levelled off.
We are systematically promoting the overall sustainability of our operations: we announced an investment of approximately EUR 1.6 million in a solar power plant in Järvelä. The investment, which supports the Group’s green transition, will consist of 3,670 solar panels that will produce electricity for the plywood and particle board mills located in the Tehdastie industrial area. The investment will also increase the share of renewable energy in our electricity consumption. The heat energy required by the Group was already 96% bioenergy-based in 2022. We believe that there will be continued demand for sustainably manufactured products with a long-term carbon binding impact.
A webcast (in Finnish) in relation to January-June 2023 Half-Year Report will be held today on 25 August 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
puh. +358 20 553 4561
Sanna Väisänen, Director, Sustainability and Communications, Koskisen Corporation
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 2022 was EUR 318 million. Read more: koskisen.com