Kotkamills Group Oyj
Interim report (Q1 and Q3)
Kotkamills Group Oyj: KOTKAMILLS INTERIM REPORT FOR JANUARY - MARCH 2019
Kotkamills Group Oyj
STOCK EXCHANGE RELEASE
31 May 2019, at 7:00 pm (CET + 1)
This is a summary of the January – March 2019 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 2019 (1-3/2018)
The Group’s revenue of EUR 86,1 million (EUR 87,6 million) decreased by EUR 1,5 million from the same period a year ago mainly due to decreased sales in the Industrial Products segment.
The Group’s EBITDA of EUR 6,6 million (EUR 4,3 million) improved from the same period a year ago due to the improved performance in the Consumer Boards segment.
Consumer Boards segment EBITDA of EUR 1,1 million (EUR -1,6 million) decreased from the previous quarter level due to lower delivery volumes but was clearly better compared to the same period a year ago due to increased sales prices.
Industrial Products segment EBITDA of EUR 4,5 million (EUR 5,1 million) decreased by EUR 0,5 million compared to the same period a year ago mainly due to lower delivery volumes.
Operating profit was EUR 2,5 million (EUR 0,3).
Events in January - March 2019
Kotkamills Group has produced Saturating Base Kraft (“SBK”) in Tainionkoski Paper Machine 7 (“PM7”) in Imatra leased from Stora Enso Oyj since the separation of Kotkamills from Stora Enso in 2010. The operations have been part of the Group’s Industrial Products segment.
As earlier informed ((Stock Exchange release on the 3rd of July 2017) the leasing agreement concerning Tainionkoski PM7 was terminated in accordance with its terms in January 2019.
To serve its existing customers and to fulfill the needs arising from the increasing demand for SBK, Kotkamils is increasing the production capacity and product portfolio of Paper Machine 1 on Kotkamills’ site in Kotka. In addition, Kotkamills has subcontracted production capacity for SBK.
Furthermore, the company will continue the earlier informed feasibility study for a possible investment to increase the production capacity of SBK with a new paper machine 3 (a “New PM3”) in Kotka. The capacity, cost estimation and project schedule of the New PM3 will be published later on subject to the positive investment decision.
February 27th, 2019, Kotkamills has been announced as one of the winners in the global innovation initiative NextGen Cup Challenge, launched by the NextGen Consortium, aiming to develop the next generation of recyclable, compostable, hot and cold to-go, fiber cups. Fully recyclable, plastic-free and biodegradable The Game Changer cup – made of Kotkamills’ ISLA® board – is one of the 12 awarded solutions that push the boundaries of sustainable design and material innovation. Company sees this recognition as a confirmation for its commitment to revolutionize paper cup production and recycling with its plastic-free next-generation barrier board solutions.
Delivery volumes in the Consumer Boards segment were lower than a year ago and compared to the previous quarter. Despite lower volumes, net sales were higher than a year ago due to higher prices.
Delivery volumes of both saturating base kraft and wood products in the Industrial Products segment were lower than a year ago but increased compared to the previous quarter mainly due to the seasonal decline in Q4/18. The demand continued on good level.
|(IFRS)|| 2019||2018 ||2018 |
| || 1.1.-31.3.|| 1.1.-31.3.|| 1.1.-31.12.|
|Group Total|| || || |
|Revenue, EUR million||86,1 ||87,6 ||353,3 |
|EBITDA, EUR million||6,6 ||4,3 ||23,2 |
|EBITDA / Revenue (%)||7,7 ||4,9 ||6,6 |
|Operating profit, EUR million||2,5 ||0,3 ||7,1 |
|Operating profit / Revenue (%)||2,9 ||0,4 ||2,0 |
| || || || |
|Return on equity (%)||-3,6||-14,2||-47,4|
|Equity ratio (%)||5,7 ||8,0 ||5,9 |
|Equity ratio, adjusted (%)*||61,1||59,8||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 loans and the junior term loan 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
There have not been any material events after the closing date.
Revenue and profit of the second quarter in 2019 are estimated to be roughly on the same level as on the first quarter of 2019.
Demand of all business segments is expected to somewhat improve from the previous quarter, 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.