Kotkamills Group Oyj
STOCK EXCHANGE RELEASE
31 May 2018, at 7 pm (CET + 1)
This is a summary of the January - March 2018 interim report. The complete report is attached to this release and is also available at www.kotkamills.com/fi/kotkamillsgroup/keyfinancials
KOTKAMILLS INTERIM REPORT
January - March 2018 (1-3/2017)
The revenue of continuing operations of EUR 87,6 million (EUR 59,9 million) improved by EUR 27,6 million from the same period a year ago mainly due to increased Consumer Boards sales.
The Group EBITDA of EUR 4,3 million (EUR 0,0 million) improved from the same period a year ago.
The operating profit of continuing operations was EUR 0,3 million (EUR -4,1 million) mainly due to further improved but still a negative impact of Consumer Boards business.
The good financial performance of Industrial Products segment with operating profit of EUR 4,6 million (EUR 6,8 million) continued also in Q1/2018.
Events in January - March 2018
In February the shareholders of the Company unanimously resolved to offer by direct issue both New A and B series shares. Pursuant to the terms of the share issue of the New A Shares, the holders of series A shares granted in connection with their participation in the share issue shareholder loans to the company in the aggregate amount of approximately EUR 5,0 million. The terms of the shareholder loans are in material respects equivalent to the terms of the existing shareholder loans.
As a result of the share issue and the utilisation of the new shareholder loans, the Company obtained financing in the aggregate amount of approximately EUR 6,0 million.
The purpose of the share issue and the utilisation of the shareholder loans is to ensure successful commercial launch of new food service board products and to secure the efficient working capital management of Kotkamills Group's further increasing consumer board products delivery volumes
The Company has decided to make a pre-feasibility study for an investment to increase the production of Saturating Base Kraft ("Laminating Papers"). In order to prepare Kotkamills Absorbex Oy, the fully owned subsidiary of Kotkamills Oy and the leading global supplier of Laminating Papers, to meet the increasing demand as well as to replace the discontinuing production volume of paper machine 7 in Tainionkoski, Imatra (Stock Exchange release on the 3rd of July 2017),
Kotkamills Oy has started the pre-feasibility study of a new paper machine 3 (a "New PM3") in Kotka. Kotkamills Absorbex Oy is part of Group's Industrial Products segment.
The final decision of this possible investment will be done by the end of year 2018. The capacity, cost estimation and start-up timing of the New PM3 will be published later on subject to the positive investment decision. The possible investment would have a positive impact on the profitability of Kotkamills Group.
The delivery volumes of both saturating base kraft and wood products in Industrial Products segment increased compared to the previous quarter. The demand continued to stay at a good level.
The delivery volumes of Consumer Boards increased clearly compared to the previous quarter and commercial ramp-up of Consumer Boards products continued in the first quarter.
|Revenue, EUR million||87,6||59,9||287,7|
|EBITDA, EUR million||4,3||0,0||28,8|
|Operating profit, EUR million||0,3||-4,1||5,7|
|Operating profit/ Revenue (%)||0,4||-6,8||2,0|
|Return on equity (%)||-14,2||-35,2||7,0|
|Equity ratio (%)||8,0||5,9||8,8|
|Equity ratio, adjusted (%)*||59,8||53,7||58,2|
|*Equity including the shareholder loans and the junior term loan|
The Group monitors capital by using an adjusted equity ratio based on the financial covenant, which is total equity added with shareholder loan and the junior term loan and divided by total assets (which shall be at least 30% in the end of each reporting period). The Group's policy is to keep the adjusted equity ratio above 30%. There have been no breaches of the financial covenant of adjusted equity ratio in the current period.
Events after reporting date
The company has, as previously announced, carried out a directed issue of series A and B shares. The issue of shares has resulted in changes in the number of shares and votes in the company as follows:
Prior to the issuance of new shares, there were in total 13,602,806 shares in the company, of which 12,281,694 series A shares, corresponding to 12,281,694 votes, and 1,321,112 series B shares, corresponding to 1,321,112 votes, 13,602,806 votes in total.
The number of shares has through the issuance of new series A shares increased by 450,770 and the number of votes has increased by 450,770. The number of shares has through the issuance of new series B shares increased by 67,493 and the number of votes has increased by 67,493.
As of 30 April 2018, there are in total 14,121,069 shares in the company, of which 12,732,464 series A shares, corresponding to 12,732,464 votes, and 1,388,605 series B shares, corresponding to 1,388,605 votes, 14,121,069 votes in total.
Outlook for 2018
The revenue of the second quarter in 2018 is estimated to be higher than in the first quarter 2018 due to increasing delivery volumes of Consumer Boards.
The profit of continuing operations for the second quarter of 2018 is estimated to be slightly better compared to the previous quarter due to increasing sales volumes and prices. This effect is estimated to be partly offset by increased raw material and energy prices.
The demand of all business segments is expected to stay at the good level, but changes in global economic situation and geopolitical risks may have weakening impact on demand.
Kotkamills Group Oyj
Board of Directors
For additional information, please contact:
CFO Petri Hirvonen, tel.+358 40 571 0834, firstname.lastname@example.org
Nasdaq Helsinki Ltd
Kotkamills Group in brief
Kotkamills is a responsible partner that delivers renewable products and performance to its customers' processes via product innovations created from wood, a renewable raw material. One of the key brands of the company include Absorbex® an innovative laminating paper product for the laminate, plywood and construction industries. Moreover, Kotkamills offers ecological, technically sound and visually attractive wood products for demanding joinery and construction. In summer 2016, Kotkamills started up a new board machine producing AEGLE(TM) Folding Boxboard and ISLA(TM) Food Service Boards, including the capability to add barriers on-machine. All Consumer Board material solutions are fully recyclable and repulpable.
Kotkamills has two production sites in Finland, located in Kotka and Imatra. The majority shareholder of Kotkamills is MB Funds, a Finnish private equity firm.
The information contained in this release shall not constitute an offer to sell or the solicitation of an offer to buy securities of Kotkamills Group Oyj in any jurisdiction.