Tornator’s net sales up by over 11% – demand for sustainably produced wood raw material remained high

Tornator Oyj

Half-year report –Stock exchange release, 24 August 2023 at 8 AM

SUMMARY 1 JAN – 30 JUNE 2023 (1 JAN – 30 JUNE 2022)                   

• Net sales increased by 11.3% to €84.2 million (75.7). The ending of timber imports from Russia and the energy crisis had a positive impact on wood demand and prices. 
• Operative operating profit increased by 7.3% to €60.8 (56.7) million. The operating profit as reported in accordance with the International Financial Reporting Standards (IFRS) was €130.1 million (46.0). The increase is explained by the application of the method of calculating the fair value of forestland based on transaction prices in the forest holdings market during the reporting period, and the resulting positive change in value (the method was not yet in use in the reference period).  
• Tornator continued to purchase forestland in Finland. Nearly 10,000 hectares of new forestland was acquired, with a total investment of almost €50 million.
• The company increased its investment capacity by agreeing an addition of €100 million to its existing Revolving credit facility. In addition, the company restructured its long-term interest rate hedges to reduce direct financing costs and shorten the average maturity of the hedges. At the same time, the exposure of the interest rate hedge portfolio to changes in fair value due to fluctuations in market interest rates is significantly reduced.
• IFRS profit at fair value for the reporting period was €100.0 million. The change in the fair value of interest rate instruments was +€2.6 million (+94.6) before taxes. The increase in statistical prices in the forestland market had a positive impact of €63.4 million (-10.1) before taxes on the fair value of the growing stock.
• Comparable return on equity was 4.2% (6.3) and 10.1% (16.8) at fair value. The equity ratio was 59.5% (53.3).

Key figures (consolidated)

Key figures (consolidated)

	H1/2023	H1/2022	Change, %
Net sales, € million	84.2	75.7	11 %
Operating profit (IFRS), € million	131.0	46.0	185 %
Operating profit, %	155.5	60.7	156 %
Profit for the period (IFRS), € million	100.0	107.8	-7 %
Return on equity, %	10.1	16.8	-40 %
Return on capital employed, %	9.3	4.5	108 %
Equity ratio, %	59.5	53.3	12 %
Average number of personnel	188	188	0 %
The key figures are calculated according to the International Financial Reporting Standards (IFRS).

Comparable key figures

	H1/2023	H1/2022	Change, %
Net sales, € million	84.2	75.7	11 %
Operative operating profit, € million	60.8	56.7	7 %
Operative operating profit, %	72.2	74.9	-4 %
Comparable net profit, € million	41.3	40.6	2 %
Comparable return on equity, %	4.2	6.3	-34 %
Comparable return on capital employed, %	4.4	5.5	-21 %

In addition to the official key figures presented above, the Tornator Group uses alternative performance measures that are comparable between years, thus better describing the success of operations. The comparable key figures have been calculated without fair value changes and apply to the whole Group. The key figures are calculated as follows:

Operating profit, IFRS			131,0
- Change in fair value of biological assets			63,4
- Change in fair value of provisions and and receivables    from additional wind power sales prices			6,7
= Operative operating profit, comparable			60,8
Profit for the period, IFRS			100,0
- Change in fair value of biological assets			63,4
- Change in fair value of provisions and long-term receivables			6,7
- Change in fair value of financial instruments			2,6
- Share of taxes of above mentioned items			-14,1
= Comparable net profit			41,3

For further information, please contact:

Chief Executive Officer (CEO) Henrik Nieminen, tel. [phone]

Chief Financial Officer (CFO) Antti Siirtola, tel. [phone]

www.tornator.fi/en

Tornator is a leader in sustainable forestry in Europe. It owns forests in Finland, Estonia and Romania. In 2022, the group’s turnover was approximately €165 million, and the balance sheet value was about €3.2 billion. The group has around 190 employees. Tornator’s own employees, and other companies and their employees working on its forestland, add up to around 1,500 person-years of employment. The owners of the parent company are Finnish, mainly institutional investors. Tornator’s mission is to generate sustainable wellbeing from forests

Tables – Condensed half-year financial statements and notes

EUR thousand	30 June 2023	30 June 2022	31 Dec 2022
	(unaudited)	(unaudited)	(audited)
Net sales	84,204	75,672	164,641
Other operating income	4,391	2,583	11,666
Change in fair value of biological assets and harvesting	63,420	-10,121	462,166
Change in inventories of finished goods and work in progress	-254	-993	-2,488
Materials and services	-12,437	-10,342	-30,071
Personnel expenses	-5,584	-5,170	-10,301
Depreciation and amortisation	-1,653	-1,638	-15,019
Reversal of impairment	3,400
Other operating expenses	-4,528	-4,032	-8,577
Operating profit	130,959	45,960	572,017
Financial income	982	187	480
Financial expenses	-12,088	-6,830	-14,118
Change in fair value of financial instruments	2,636	94,572	110,902
Net financial items	-8,470	87,930	97,264
Profit before tax	122,490	133,890	669,281
Income taxes	-9,510	-28,413	-42,897
Change in deferred taxes	-13,004	2,343	-84,456
Profit for the period	99,976	107,820	541,927
Distribution:
To shareholders of the parent company	99,976	107,820	541,927
Consolidated statement of comprehensive income
Profit for the period	99,976	107,820	541,927
Other comprehensive income for the period after taxes:
Items not recognised later through profit and loss
Other items of comprehensive income (after taxes)			31
Items that may later be recognised through profit and loss
Translation difference	-29	4	-28
Revaluation of forest land	2,137		211,424
Comprehensive income for the period total	102,084	107,823	753,355
Distribution:
To shareholders of the parent company	102,084	107,823	753,355

Condensed consolidated balance sheet
EUR thousand	30 June 2023	30 June 2022	31 Dec 2022
	(unaudited)	(unaudited)	(audited)
ASSETS
Non-current assets
Forest assets	3,219,492	2,329,029	3,101,049
Biological assets	2,844,251	2,222,936	2,737,264
Bare land	375,242	106,093	363,785
Other property, plant and equipment	15,737	15,562	16,006
Intangible assets	1,734	1,205	1,984
Right-of-use assets	1,820	1,944	1,911
Derivatives	43,692	36,130	42,352
Other investments	111	111	111
Non-current receivables	10,447	18,733	7,513
Non-current assets total	3,293,034	2,402,713	3,170,926
Current assets
Inventories	90	45	92
Accounts receivable and other receivables	62,139	51,078	53,061
Investments	932	2,323	356
Cash and cash equivalents	5,604	2,836	19,244
Current assets total	68,765	56,283	72,753
Total assets	3,361,799	2,458,997	3,243,679
EQUITY AND LIABILITIES
Equity attributable to shareholders of the parent company
Share capital	50,000	50,000	50,000
Other equity	1,943,931	1,256,315	1,901,847
Total equity	1,993,931	1,306,315	1,951,847
Liabilities
Non-current liabilities
Deferred tax liabilities	433,361	280,224	419,823
Financial liabilities	799,103	748,844	749,052
Derivatives		11,844	1,620
Lease liabilities	1,578	1,720	1,644
Other non-current liabilities	186	237	186
Non-current liabilities total	1,234,228	1,042,869	1,172,325
Current liabilities
Financial liabilities	98,351	62,858	69,016
Accounts payable and other payables	23,025	17,708	23,626
Income tax liabilities	1,646	19,824	15,188
Lease liabilities	340	303	355
Provisions	10,278	9,120	11,323
Current liabilities total	133,640	109,813	119,508
Total liabilities	1,367,868	1,152,682	1,291,833
Total equity and liabilities	3,361,799	2,458,997	3,243,679

Statement of changes in equity

EUR thousand	Share capital	Share premium	Translation difference	Revaluation reserve		Retained earnings	Total equity
Equity 1 January 2023	50,000	29,995	-10,877	211,424		1,671,304	1,951,847
Comprehensive income
Profit for the period						99,976	99,976
Other items of comprehensive income (after taxes)
Revaluation of forest land				2,137			2,137
Translation difference			-29				-29
Comprehensive income for the period			-29	2,137		99,976	102,084
Transactions with shareholders
Dividends paid						-60,000	-60,000
Total transactions with shareholders						-60,000	-60,000
Equity 30 June 2023 (unaudited)	50,000	29,995	-10,906	213,562		1,711,280	1,993,931
Equity 1 January 2022	50,000	29,995	-10,849			1,189,346	1,258,492
Comprehensive income
Profit for the period						107,820	107,820
Other items of comprehensive income (after taxes)
Translation difference			4				4
Comprehensive income for the period			4			107,820	107,823
Transactions with shareholders
Dividends paid						-60,000	-60,000
Total transactions with shareholders						-60,000,0	-60,000,0
Equity 30 June 2022 (unaudited)	50,000	29,995	-10,845			1,237,166	1,306,315
Equity 1 January 2022	50,000	29,995	-10,849			1,189,346	1,258,492
Comprehensive income
Profit for the period						541,927	541,927
Other items of comprehensive income (after taxes)
Revaluation of forest land				211,424			211,424
Other items of comprehensive income (after taxes)						31	31
Translation difference			-28				-28
Comprehensive income for the period			-28	211,424		541,958	753,355
Transactions with shareholders
Dividends paid						-60,000	-60,000
Total transactions with shareholders						-60,000,0	-60,000,0
Equity on 31 Dec 2022	50,000	29,995	-10,877	211,424		1,671,304	1,951,847

Condensed statement of cash flows
EUR thousand	1 Jan - 30 Jun 2023	1 Jan - 30 Jun 2022	1 Jan – 31 Dec 2022
Cash flow from operating activities
Cash receipts from transactions in forestry	72,113	46,619	140,099
Cash receipts from transactions in land sales	968	3,559	5,201
Cash receipts from other operating income	3,152	3,096	24,272
Cash paid to suppliers and employees	-28,737	-23,433	-49,356
Cash flow from operating activities before financial items and taxes	47,496	29,841	120,217
Interest paid, interest-bearing debt	-8,536	-1,390	-9,191
Interest received	-142	-2,628	-4,405
Other financial expenses	-1,016	-540	-798
Interest received	788	113	428
Income taxes	-20,783	-19,602	-41,294
Cash flow from operating activities	17,807	5,794	64,956
Cash flow from investing activities
Investments in biological assets	-43,872	-23,674	-67,094
Investments in tangible assets, forestland	-5,422	-2,926	-8,293
Investments in other tangible and intangible assets	-868	-669	-3,466
Investments in money market funds	-576
Proceeds from sale of unlisted securities		4,724	6,690
Cash flow from investing activities	-50,738	-22,545	-72,162
Cash flow from financing activities
Withdrawal of long-term loans
Repayment of long-term loans			-3
Withdrawal of short-term loans	79,485	62,961	70,000
Repayment of short-term loans
Repayment of leasing liabilities	-174	-177	-343
Dividends paid	-60,000	-60,000	-60,000
Cash flow from financing activities	19,311	2,784	9,654
Net increase/decrease in cash and cash equivalents	-13,620	-13,967	2,448
Cash and cash equivalents at beginning of period	19,244	16,802	16,802
Effect of exchange rate changes on cash and cash equivalents	-21	1	-6
Cash and cash equivalents at end of period	5,604	2,836	19,244

 

Attachment

• Tornator Half-year Report 30 June 2023