Koskisen Oyj: Koskisen's revenue increased - the profitability of the Sawn Timber Industry segment improved

Koskisen Corporation stock exchange release, November 15, 2024, at 08:30 a.m. EET

Koskisen's revenue increased - the profitability of the Sawn Timber Industry segment improved

This release is a summary of Koskisen Corporation's January-September 2024 Interim report. The complete Interim Report is attached, and also available on the company's website at koskisen.com/investors.

July-September 2024 in brief
· Revenue increased and amounted to EUR 67.8 (55.5) million.
· EBITDA increased and amounted to EUR 3.6 (1.3) million.
· The EBITDA margin was 5.4 per cent (2.4).
· Adjusted EBITDA amounted to EUR 3.7 (1.4) million.
· The adjusted EBITDA margin was 5.5 per cent (2.5).
· Operating profit amounted to EUR 0.4 (-1.0) million and was 0.6 per cent (-1.7) of revenue.
· The profit for the financial period amounted to EUR -0.4 (-1.0) million.
· Basic earnings per share were EUR -0.02 (-0.04).

January-September 2024 in brief
· Revenue increased and amounted to EUR 209.3 (202.6) million.
· EBITDA decreased and amounted to EUR 18.5 (27.8) million.
· The EBITDA margin was 8.9 per cent (13.7).
· Adjusted EBITDA amounted to EUR 18.6 (27.7) million.
· The adjusted EBITDA margin was 8.9 per cent (13.7).
· Operating profit amounted to EUR 10.5 (21.4) million, representing 5.0 per cent (10.6) of revenue.
· The profit for the financial period amounted to EUR 6.7 (17.6) million.
· Basic earnings per share were EUR 0.29 (0.77).

The figures in brackets refer to the comparison period, i.e. the corresponding period in the previous year, unless specified otherwise.

Profit guidance for 2024 unchanged (published on 16 February 2024)
Koskisen Group's revenue for 2024 is expected to grow from the level of 2023. The adjusted EBITDA margin is expected to be 8-12 per cent.

Key figures

EUR million	7-9 2024	7-9 2023	Change, %	1-9 2024	1-9 2023	Change, %	1-12 2023
Revenue	67.8	55.5	22.1	209.3	202.6	3.3	271.3
EBITDA	3.6	1.3	171.0	18.5	27.8	-33.2	33.0
EBITDA margin, %	5.4	2.4		8.9	13.7		12.2
Adjusted EBITDA	3.7	1.4	171.1	18.6	27.7	-32.8	33.1
Adjusted EBITDA margin, %	5.5	2.5		8.9	13.7		12.2
Operating profit (EBIT)	0.4	-1.0	145.2	10.5	21.4	-51.1	24.4
Operating profit (EBIT) margin, %	0.6	-1.7		5.0	10.6		9.0
Profit for the period	-0.4	-1.0	53.5	6.7	17.6	-61.8	20.2
Basic earnings per share, EUR	-0.02	-0.04		0.29	0.77		0.88
Diluted earnings per share, EUR	-0.02	-0.04		0.29	0.76		0.87
Gross investments	7.3	4.4		17.2	19.4		32.1
Equity per share, EUR				6.4	6.3		6.4
Return on capital employed (ROCE), %				6.4	16.4		12.1
Working capital, end of period				50.4	39.6		37.9
Net cash flow from operating activities				5.4	8.0		14.9
Equity ratio, %				53.4	55.2		54.8
Gearing, %				17.2	-5.9		-1.8

CEO Jukka Pahta:
Koskisen Group's third-quarter profitability improved year-on-year, with adjusted EBITDA amounting to EUR 3.7 (1.4) million. The adjusted EBITDA margin was 5.5 per cent (2.5). The level of profit performance achieved by the Group is satisfactory in an operating environment characterised by continued uncertainty. The recovery of construction, in particular, has been slower than anticipated. The summer shutdowns took place as planned in July-August, which was reflected seasonally in production volumes and revenue in the third quarter.

The profitability of the Sawn Timber Industry segment improved substantially year-on-year, with EBITDA amounting to EUR 1.7 (-1.0) million. Profitability was improved by increased delivery volumes and the higher price level of sawn timber in the comparison period. The demand situation in the Sawn Timber Industry segment as a whole has not changed significantly, although demand picked up slightly in Finland. Sawn timber inventories in the industry and at Koskisen were at a low level.

Sawn timber production has developed well. The targeted production level, corresponding to an annual output of approximately 400,000 m3, was achieved at the end of the period. The development of shift-specific production efficiency is continuing: production will be run at the dryers' maximum capacity, while simultaneously reducing weekly production shifts and moving maintenance shifts from weekends to weekdays. The development of the new sawmill's production efficiency is gradually starting to be reflected in profitability.

The delivery prices of softwood logs continued to rise slightly, posing a challenge to the profitability of the Sawn Timber Industry segment. In wood sourcing, raw material reserves and inventories were at a good level, and raw material supply was in line with plans.

The profitability of the Panel Industry segment decreased year-on-year, with EBITDA amounting to EUR 1.8 (2.6) million primarily due to increased raw material costs. The market situation for birch plywood was good after the summer, but weakened towards the end of the quarter as the continued weak economic situation in Central Europe was reflected in the market demand for panel products. The aim is now to systematically optimise the inventory levels of panel products to correspond to demand at the different stages of the value chain.

In order to prepare for delays in the recovery of demand, we commenced change negotiations in November with regard to Panel Industry's plywood and chipboard production. The change negotiations enable us to prepare for potential adjustments in production by means of temporary lay-offs if necessary. For chipboard products, which are more dependent on the demand for construction, demand has remained modest. Production was scaled back in a planned manner as necessary.

We have continued to execute our strategy and the related increase in operational efficiency. The primary goal has been to secure the sawmill's production volumes and achieve the targeted level, while continuously improving shift-specific production efficiency.

The log yard investment, which is an integral part of the development of the Sawn Timber Industry segment, is progressing as planned. The log yard will be commissioned on schedule at the beginning of 2025. When completed, the integrated system, which combines all sawmill operations, will boost the efficiency of the production process, significantly improve logistics, material and energy efficiency, and reduce transport-related carbon dioxide emissions. The newest channel kiln was completed and commissioned in June 2024.

The growth of the Panel Industry segment is supported by an expansion investment in Poland to increase the capacity of the Kore business. The expansion is under way and has progressed according to plan, with full production readiness set to be achieved by the end of the year. Small-scale production for selected customers has already begun. In addition to the investment, Kore has focused on the development and reorganisation of internal processes in order to achieve profitability targets.

Systematic measures to accomplish sustainable growth in line with the strategy will continue.

Webcast
A webcast (in Finnish) in relation to January-September 2024 Interim report will be held today on 15 November 2024 at 10:00 a.m. EET. 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
[e-mail]
puh. [phone]

Media enquires:
Sanna Väisänen, Director, Sustainability and Communications, Koskisen Corporation
[e-mail]
puh. [phone]

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. We manufacture high-quality and sustainable circular bioeconomy products that store carbon for decades. The Group's revenue in 2023 was EUR 271 million. Read more: koskisen.com