Published: 2019-11-29 16:46:43 CET
Nordic Fibreboard
Quarterly report

Skano Group Interim Report 3rd Quarter 2019



Consolidated net sales for the continuing operations of fibreboard, furniture retail and the recently commenced operations of renting out space in our property unit, for Q3 2019 were € 3.25 million, a 6% increase compared to the same period in 2018.

Fibreboard sales increased with 5% during Q3 2019 to € 3.06 million compared to the same period last year, this being mainly a result of securing new customers across the main application segments. The remaining group sales of continuous operations, consisting of furniture retail and rental operations less group transactions, were € 0.19 million (versus € 0.16 million in Q3 2018). Total sales of Skano Group, including the discontinued business of Skano Furniture Factory, were € 3.61 million, down 3% from Q3 2018.

Skano Group recorded EBITDA of positive € 81 thousand for Q3 2019, a 76% increase compared to EBITDA of € 46 thousand in Q3 2018. Fibreboard EBITDA of € 125 thousand was € 16 thousand less than recorded in Q3 2018. Rental income from renting out part of our head office building in Suur-Jõe 48 in Pärnu showed positive EBITDA of € 14 thousand while total furniture operations had negative EBITDA of € 59 thousand. Net loss for Q3 2019 was € 700 thousand, which included loss of € 540 thousand from the sale of Skano Furniture Factory OÜ (Q3 2018: net loss € 211 thousand).

Divisional review of third quarter 2019

Fibreboard sales in Q3 2019 were € 3.06 million, which is 5% up from the same period in 2018. Sales growth came from securing new customers in Europe and Asia within industrial and display board segments. Gross margin in Fibreboard has continued to improve every quarter this year. We recorded gross margin of 18% in Q3, up from 15% and 13% respectively in Q2 and Q1 this year (gross margin was 20% in Q3 2018). Other operating expenses (including overhead costs) were € 415 thousand, down 3.5% from same period last year, which resulted in EBITDA being € 125 thousand (Q3 2018: € 141 thousand).

Furniture wholesale in Q3, up to when it was divested on 5 September, was € 353 thousand (Q3 2018: € 630 thousand), while furniture retail sales in Q3 2019 were € 265 thousand, down 20% from same period last year. EBITDA for furniture wholesale were showing loss of € 12 thousand, while furniture retail showed loss of € 95 thousand (2018 Q3: loss € 50 thousand).

Balance Sheet

As of 30.09.2019 the total assets of Skano Group AS were € 9.2 million (30.09.2018: € 11.0 million). The change in total assets is mainly related to exiting furniture business. The liabilities of the company as of 30.09.2019 were € 7.6 million (30.09.2018: € 7.7 million), of which Skano has borrowings of € 4.6 million as at 30.09.2019 (30.09.2018: € 4.9 million).

Receivables and prepayments amounted to € 1.8 million as at 30.09.2019 (30.09.2018: € 1.6 million). Inventories were € 1.1 million as of 30.09.2019 (30.09.2018: € 2.4 million). Property, plant and intangibles were € 6.3 million as of 30.09.2019 (€ 7.0 million as of 30.09.2018).


Fibreboard sales have grown due to our successful push into various applications which have more global reach than our traditional sales of windboards and insulation boards sold mainly in our traditional markets of Finland, Russia and Estonia. The industrial segment offers more potential as customers are becoming more conscious of using environmentally friendly materials, such as our fibreboards. We see further upside potential in sales growth of display boards, especially in the dynamic Asian market.

Divisional review

Revenue by business segments


 € thousand € thousand
 Q3 2019Q3 20189M 20199M 2018
Continued operations    
Fibreboards production and sales3,0642,9248,9708,603
Furniture retail2653331,1261,095
Rental and operating of own or leased real estate320480
Group transactions(109)(177)(525)(537)
TOTAL from continued operations3,2533,0809,6209,162
Discontinued operations    
Furniture production and sales3536301,7032,207



Profit by business segments

 Q3 2019Q3 20189M 20199M 2018
EBITDA by business units:    
Fibreboards production and sales125141117349
Furniture production and wholesale*(12)(31)(176)15
Furniture retail(95)(50)(134)(80)
Rental and operating of own or leased real estate140300
Group transactions49(14)100(22)
TOTAL EBITDA8146(63)261
Net financial costs61877759212
NET PROFIT/ LOSS(700)(211)(1,322)(505)

* Discontinued operations, the subsidiary has been sold on 05.09.2019
**We incurred a loss of € 540 thousand on sale of Skano Furniture Factory


The total sales of fibreboards for Q3 2019 were € 3.06 million, which are 5% up from Q3 2018 sales level (€ 2.92 million). We recorded sales increase in EU, Asia and Africa while sales were dropping in Russia and Middle East, reflecting the subdued economic environment in both regions.


 € thousand€ thousand
 Q3 2019Q3 20189M 20199M 2018
European Union (including Suomen Tuulileijona sales)2,2912,0936,6206,455
Middle East3474160248

FURNITURE wholesale sales*

Prior to the sale on 5 September 2019 of our furniture wholesale company Skano Furniture Factory, sales in this unit were € 353 thousand, compared to the full Q3 2018 sales of € 630 thousand.


 € thousand€ thousand
 Q3 2019Q3 20189M 20199M 2018
Skano Retail91177476530
Other countries5451265189

* Discontinued operations, the subsidiary was sold on 05.09.2019


Furniture retail operations recorded sales of € 265 thousand in Q3 2019, a decline of 20% from Q3 2018. We initiated closing down sales of our shops in Vilnius and Riga in early September, and these shops ended their operations last day in September.  


 € thousand€ thousandNumber of stores 
 Q3 2019Q3 20189M 20199M 201830.09.201930.09.2018

* Latvian and Lithuanian stores were closed on 30.09.2019


As of 30.09.2019 the total assets of Skano Group AS were € 9.2 million (30.09.2018: € 11.0 million). The liabilities of the company as of 30.09.2019 were € 7.6 million (30.09.2018: € 7.7 million), of which Skano has borrowings of € 4.6 million as at 30.09.2019 (30.09.2018: € 4.9 million).

Receivables and prepayments amounted to € 1.8 million as at 30.09.2019 (30.09.2018: € 1.6 million). Inventories were € 1.1 million as of 30.09.2019 (30.09.2018: € 2.4 million).  Financial investments (i.e. Trigon Property Development shares) were € 378 thousand as at 30.09.2019, down from € 399 thousand as at 30.06.2019. Total non-current assets were € 6.3 million as of 30.09.2019 (€ 7.0 million as of 30.09.2018).

During 2019 9M, the Group’s cash flows from operating activities totalled cash inflow of € 279 thousand (2018 9M: cash inflow € 295 thousand). Investment activities resulted in cash outflows in amount of € 117 thousand during 2019 9M, compared to outflows in amount € 197 thousand during 9M 2018. Financing activities also resulted in cash outflows of € 172 thousand during 9M 2019 (2018 9M: cash outflow € 129 thousand). Net cash effect during 2019 9M showed cash outflows of € 10 thousand, (2018 9M: cash outflows € 31 thousand).



We expect the trend to continue with growing sales of our various applications outside of our historic focus on the construction sector in our nearby markets. The construction sector in Finland and Russia is subdued, thus no sales growth in these two historically important markets are expected. Increased electricity prices should be more than offset with the decline of the woodchip and gas prices. In addition we have reduced our product mix by ending the production of some of the slow moving products, which should also help profitability.


We will continue our process of exiting from the furniture retail segment. Our Tartu shop will cease operations at end of November, and we have also commenced closing down sales in our Tallinn shop. We expect to close the Tallinn shop and Pärnu factory outlet shop in early 2020, which will mark the total exit of Skano Group’s furniture operations.


On the 30th of September 2019, the Group employed 128 people (compared to 213 people as of 30.09.2018). The average number of personnel in Q3 2019 was 123 (Q3 2018: 213). The drop in the number of employees is related to the sale of subsidiaries.

During first nine months of 2019, wages and salaries with taxes amounted to € 2,7 million (first nine months 2018: € 2.7 million). Payments made to management board members of all group companies including all subsidiaries with relevant taxes were € 103 thousand in nine months 2019 and € 136 thousand in nine months 2018.


* Including discontinued operations

€ thousand    
Income statementQ3 2019*Q3 2018*9M 2019*9M 2018*
EBITDA margin2%1%(1%)2%
Operating profit(82)(135)(564)(294)
Operating margin(2%)(4%)(5%)(3%)
Net profit (700)(211)(1,322)(505)
Net margin(19%)(6%)(12%)(4%)
* Including discontinued operations    
Statement of financial position30.09.201931.12.201830.09.201831.12.2017
Total assets9,21310,30711,01210,937
Return on assets(14%)(9%)(5%)(1%)
Return on equity(82%)(31%)(15%)(3%)
Debt-to-equity ratio83%72%70%66%
Share 30.09.201931.12.201830.09.201831.12.2017
Last Price*0.410.360.490.62
Earnings per share(0.29)(0.20)(0.11)(0.03)
Price-earnings ratio(1.38)(1.82)(4.36)(21.83)
Book value of a share0.360.640.730.83
Market to book ratio1.140.560.670.74
Market capitalization, € thousand1,8271,6202,2052,771
Number of shares, piece4,499,0614,499,0614,499,0614,499,061

EBITDA = Earnings before interest, taxes, depreciation and amortization
EBITDA margin = EBITDA / Revenue
Operating margin = Operating profit / Revenue
Net margin = Net profit / Revenue
Return on assets = Net profit / Total assets
Return on equity = Net profit / Equity
Debt-to-equity ratio = Liabilities / Total assets
Earnings per share = Net profit / Total shares
Price-earnings ratio = Last price / Earnings per share
Book value of a share = Equity / Total shares
Market to book ratio = Last price / Book value of a share
Market capitalization = Last price * Total shares



Skano Group AS’s interest rate risk relates to changes in EURIBOR (Euro Interbank Offered Rate) since our loans are linked to EURIBOR. At 30.09.2019 six months’ EURIBOR rate was (0,394)% and at 30.09.2018 six months’ EURIBOR rate was (0.268)%. As EURIBOR is negative and in the loan agreements it is set to 0%, the continued negative rate of EURIBOR does not have interest expense reducing effect. As the borrowing have a maturity of up to 2 years or less, management is in opinion that the floating interest rate will not bear significant impact to Group’s cash flows.

The dates for fixing interest rates on the basis of changes in EURIBOR are the 30th day of every six months for its bank loans.

The interest rate risk also depends on the overall economic situation in Estonia and in the eurozone. Skano Group AS has a cash flow risk arising from the interest rate risk because its loans have a floating interest rate. Management believes that the cash flow risk is not significant, therefore no hedging instruments are used.


The foreign exchange risk is the risk that the company may have significant loss because of fluctuating foreign exchange rates. However, Skano Group has no operations outside of the euro zone and most of our export-import contracts to customers outside of the euro zone are nominated in euros. Raw materials for production and goods purchased for resale in our retail operations are mainly in euros.


The risk of the economic environment for the fibreboard division depends on general developments in the construction and industrial segments; the risk for the furniture division depends on the expectations of the customers towards economic welfare in future.


The management estimates that the fair values of cash, accounts payable, short-term loans and borrowings do not materially differ from their carrying amounts. The fair values of long-term loans do not materially differ from their carrying amounts because their interest rates correspond to the interest rate risks prevailing on the market.


The management board has prepared the management report and the consolidated financial interim statements of Skano Group AS for the third quarter 2019.

The management board confirms that the management report on pages 4-9 provides a true and fair view of the business operations, financial results and financial condition of the parent company and the entities included in consolidation.

The management board confirms that according to their best knowledge the consolidated financial interim report on pages 11-32 presents a fair view of the assets, liabilities, financial position and profit or loss of the issuer and the entities involved in the consolidation as a whole according to the International Financial Reporting Standards as they are adopted by the European Union and contains a description of the main risks.


Torfinn Losvik

Chairman of the Management Board                                

Pärnu, November 29, 2019


Skano Group interim report 2019 Q3 and 9M.pdf