Kotkamills Group Oyj: KOTKAMILLS INTERIM REPORT FOR JANUARY - MARCH 2016 Kotkamills Group Oyj STOCK EXCHANGE RELEASE 31 May 2016, at 4 pm (CET + 1) This is a summary of the January - March 2016 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 2016 (1-3/2015) The revenue of continued operations was MEUR 51,0 (0,0). The operating profit of continued operations was MEUR -2,1 (28,8). Events in January-March 2016 According to the plan, the production of magazine paper discontinued in January and the conversion of paper machine 2 to board machine was started. Demand of Industrial Products segment's products continued to stay at a good level. Consumer Boards had no deliveries during the reporting period. Key figures The business of Magazine Papers was classified as a discontinued operation in January 2016 and thus the net result of the business of Magazine Papers is presented in the statement of profit or loss under "Profit (loss) from discontinued operations" separately from continuing operations for all periods presented. The Kotkamills Group Oyj became the parent company on 24 March 2015, when the Company acquired the entire share capital of Kotkamills Oy, thus the comparison quarter, Q1 2015, does not include business activities of continued operations. The Group recognized a gain, i.e. negative goodwill, of EUR 30,5 million on the acquisition of Kotkamills Oy. The gain has been recognized in the other operating income in Q1 2015. | (IFRS) | 1-3/2016 | 1-3/2015 | 1-12/2015 | | Continued operations | | | | | Revenue, EUR million | 51,0 | 0,0 | 146,4 | | EBITDA, EUR million | -0,7 | 28,8 | 46,0 | | Operating profit, EUR million | -2,1 | 28,8 | 40,9 | | Operating profit/ Revenue (%) | -4,1 | - | 27,9 | | | | | | | Group Total | | | | | Return on equity (%) | -20,9 | 119,4 | 122,4 | | Equity ratio (%) | 11,5 | 13,0 | 13,1 | | Equity ratio, adjusted (%)* | 45,3 | 44,2 | 44,3 | | *Equity includes shareholder loans | | | |
The Group monitors capital using an equity ratio and an adjusted equity ratio based on the financial covenants, which is total equity added with shareholder loan and divided by total assets. The Group's policy is to keep the adjusted equity ratio above 30%. There have been no breaches of the financial covenants of equity ratio in the current period. Events after reporting date On May 18, 2016, the Company informed that the construction work of the new BM 2 of Kotkamills Oy has progressed to the very advanced stage. The start-up of the new board machine is estimated to take place during July 2016. The earlier target set already in 2015 was last week of June 2016. On May 20, 2016 the Company informed, that Kotkamills Oy has signed a contract of approximately EUR 20 million with a Nordic financial institution concerning sale of trade receivables of the company to the financial institution (on an ongoing, non-recourse basis on customary market terms). The entry into the transaction is expected to increase the efficiency of the Kotkamills Group's working capital management. Outlook for 2016 The revenue and the profit for the second quarter of 2016 will decrease due the ending of the magazine paper production, maintenance shutdown of Kotka mill in May and the investment shutdown until July 2016. Market of the other continued operations' businesses is expected to be at least at the same level as in the last year, but ongoing uncertain economic situation in Europe and geopolitical risks may have weakening impact on demand. Also present currency rates and energy price levels are expected to support the Group's performance, but possible 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, petri.hirvonen@kotkamills.com DISTRIBUTION:
Nasdaq Helsinki Ltd
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www.kotkamills.com Kotkamills Group in brief Kotkamills is a responsible partner that delivers renewable products and high quality performance to its customers' processes via product innovations created from wood, a renewable raw material. Kotkamills' key brands include Absorbex® and Imprex®, both innovative laminating paper products for the laminate and plywood industries. Moreover, Kotkamills also offers ecological, technically sound and visually attractive wood products for demanding joinery and construction. The start-up of the new board machine producing totally recyclable Consumer Board products is due in 2016. www.kotkamills.com Disclaimer
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. HUG#2016706
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