Arctic Paper S.A. Q4, 2023 - preliminary results*: Strengthened positions in uncertain times

[1]Arctic Paper S.A. reports in PLN. In the English press release, the amounts above were converted to EUR at the average rates for the quarter respectively.

"Arctic Paper will continue to drive our strategic diversification in energy and packaging, while maintaining our strong positions in paper and pulp."

Michal Jarczyński, CEO

Preliminary selected financial results: Arctic Paper Group & Arctic Paper (paper segment)

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PLN (million) Q4, 2023 Q4, 2022 Changes FY 2023 FY 2022
Sales revenue, Arctic 825,9 1 085,1 -259,2 3 549,2 4 894,3
Paper Group
Sales revenue Arctic 581,2 770,0 -188,8 2 460,4 3 580,0
Paper (paper segment)
EBITDA, Arctic Paper 96,3 140,0 -43,7 475,3 974,0
Group
EBITDA Arctic Paper 119,8 122,3 -2,5 375,8 685,2
(paper segment)
EBIT, Arctic Paper 67,1 109,3 -42,2 357,1 843,0
Group
EBIT Arctic Paper 97,3 101,8 -4,5 292,3 605,2
(paper segment)
Net profit, Arctic 35,6 74,8 -39,2 272,4 756,8
Paper Group
Net profit, Arctic 60,8 70,3 -9,5 264,3 519,6
Paper (paper segment)
Net profit per 0,69 1,05 -0,36 3,57 9,11
share[2] (PLN/share)
Net debt -347,5 -276,2 -71,3 -347,5 -276,2

[2] Net profit per share: net profit for the paper segment plus 51% of the net profit for Rottneros divided by the number of shares.

The year 2023 ended as it begun, with a mixed picture due to the uncertainty affecting the general economy. For the fourth quarter, Arctic Paper's consolidated sales decreased to PLN 825.9 million (1,085.1 million), although it is worth noting that the comparative quarter was one of the best in the Group's history. EBITDA reached PLN 96.3 million (140.0), corresponding to an EBITDA-margin of 11.7 percent (12.9). The paper segment outperformed the pulp segment, reminding us of the advantages of combining the two segments as the fluctuations balance each other.

For the full year, the Group's consolidated sales reached PLN 3,549.2 million (4,894.3 million) with an EBITDA of PLN 475.3 million (974.0 million) and an EBITDA margin of 13.4 percent (19.9). This makes 2023 the second-best year in the Group's history. Given Arctic Paper's strong financial position, the management board can recommend a dividend of PLN 1.0 (2.7) without compromising the ambitious investment program for the Group.

Although the paper segment's sales decreased to PLN 581.2 million (770.0 million) compared to the exceptional period last year, EBITDA remained stable at PLN 119.8 million (122.3 million) and the EBITDA margin increased to 20.6 percent (15.9). The positive development is a result of our continued focus on efficiency and cost optimizing. The fourth quarter is normally weaker, but this year we saw positive signals of a change in demand on the paper market.

For Rottneros - the pulp segment - revenue for the fourth quarter decreased to SEK 637 million (730 million). EBITDA amounted to -76 MSEK (31) due to lower pulp prices, higher variable costs, and the annual maintenance shutdown in Vallvik. For the full year, sales reached SEK 2,755 million (2,980) with an EBITDA of SEK 252 million (691) thanks to volume growth and cost efficiency. During the period, the list price for NBSK has strengthened and reached 1,300 USD in January 2024.

For the packaging segment, the investment in a new production unit for molded fiber trays in Kostrzyn is delayed due to longer delivery times for the equipment. We expect production to begin in Q3, 2024.

During the period, a financing agreement was reached regarding the investments in upgrading the biomass plant and in supplementary production of wood pellets at the mill in Grycksbo. The 17 MWh solar project in Kostrzyn will be completed in the second quarter of 2024, and we are working to expand our portfolio of renewable energy projects to achieve self-sufficiency. We will continue to grow in the energy segment.

We have entered a new year, but the uncertainty that affected our operations in 2023 remains. However, the Group is stronger than ever, and Arctic Paper will continue to drive our strategic diversification in energy and packaging, while maintaining our strong positions in paper and pulp. As the green transition accelerates driven by both customer demands and new EU-regulations, it is more important than ever to have the financial strength to invest. Therefore, we look to the future with confidence.

Michal Jarczyński, CEO of Arctic Paper S.A.

This disclosure contains information that Arctic Paper is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 15-02-2024 17:38 CET.