Kotkamills Group Oyj
STOCK EXCHANGE RELEASE
28 February 2020, at 7:00 pm (CET + 1)
This is a summary of the October – December 2019 interim report. The complete report is attached to this release and is also available at www.kotkamills.com/company/financials.
KOTKAMILLS INTERIM REPORT
October – December 2019 (10-12/2018)
The Group’s revenue of EUR 84,0 million (EUR 85 million) decreased by EUR 1,0 million from the same period a year ago following the decreased sales prices of wood products.
The Group’s EBITDA of EUR 8,4 million (EUR 7,7 million) increased by EUR 0,7 million from the same period a year ago driven by decreased pulp and energy costs.
Consumer Boards segment EBITDA of EUR 2,5 million (EUR 1,4 million) increased EUR 1,0 million from the same period a year ago following lower fiber and chemical costs.
Industrial Products segment EBITDA of EUR 5,4 million (EUR 4,7 million) increased by EUR 0,7 million compared to the same period a year ago mainly due to higher sales prices and lower operating costs.
Operating profit was EUR 3,7 million (EUR 3,6).
January – December 2019 (1-12/2018)
The Group’s revenue of EUR 342,8 million (EUR 353,3 million) decreased by EUR 10,5 million from the same period a year ago due to decreased sales volumes in Consumer Boards segment decreased sales volumes of saturating base kraft and decreased sales prices of wood products in the Industrial Products segment.
The Group EBITDA of EUR 26,4 million (EUR 23,2 million) increased EUR 3,2 million following the increased sales prices and decreased operating costs.
Operating profit was EUR 9,1 million (EUR 7,1 million).
Events in October – December 2019
Delivery volumes in the Consumer Boards segment were lower than a year ago and slightly decreased from previous quarter’s level. Sales prices increased from both previous year’s and previous quarter’s levels.
In the Industrial Products segment, delivery volumes of saturating base kraft were on the same level as a year ago and increased from the previous quarter’s level. Sales prices increased slightly from previous quarter’s level and were higher than on the same period a year ago.
Delivery volumes of wood products were higher than a year ago and on previous quarter’s level. Sales prices of wood products improved slightly from the previous quarter’s level but have decreased clearly from the same period a year ago.
|Revenue, EUR million||84,0||85,0||342,8||353,3|
|EBITDA, EUR million||8,4||7,7||26,4||23,2|
|EBITDA / Revenue (%)||10,0||9,0||7,7||6,6|
|Operating profit, EUR million||3,7||3,6||9,1||7,1|
|Operating profit / Revenue (%)||4,5||4,2||2,7||2,0|
|Profit (loss) of the period, EUR million|
|Return on equity (%)||-19,5||-15,1||-70,0||-47,4|
|Equity ratio (%)||3,0||5,9||3,0||5,9|
|Equity ratio, adjusted (%)*||64,4||60,4||64,4||60,4|
|*Equity including 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
Kotkamills Group Oyj ("Kotkamills") as parent and, among others, Kotkamills' wholly owned subsidiary Kotkamills Oy as borrower, have entered into a senior facility agreement with a Nordic commercial bank on 28 February 2020 (the "SFA"). Kotkamills will use the loan proceeds to repay the remaining outstanding amount (plus accrued interest thereon) of the EUR 105,000,000 Senior Secured Callable Bonds 2015/2020 (ISIN: FI4000148705) (the "Bonds") on 13 March 2020 which is the final redemption date for the Bonds (the "Final Redemption Date") in accordance with the terms and conditions of the Bonds. The utilisation of the loan facility under the SFA is subject to customary conditions and Kotkamills expects to satisfy such conditions well in advance of the Final Redemption Date. The redemption will not require action from the bondholders.
Revenue of the first quarter in 2020 is estimated to be higher than in the fourth quarter of 2019 following improving delivery volumes in all segments. Due to this, the profit for the first quarter of 2020 is estimated to be slightly higher than in the previous quarter.
Demand of all business segments is expected to stay on good level, but changes in the global economic situation and geopolitical risks may have weakening impact on demand.
Currency exchange rate changes and possible further increases in raw material prices could adversely impact the Group’s profit development.
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™ Folding Boxboard and ISLA™ Food Service Boards, including the capability to add barriers on-machine. All Consumer Board material solutions are fully recyclable and repulpable.
Kotkamills’ production site is located in Kotka, Finland. 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.