Segezha Group announces IFRS results for 2019
Revenue grew by 1.0% year-on-year to RUB 58.5bn, the Group's net income was RUB 4.8bn
Segezha Group, a subsidiary of Sistema PJSFC and a leading Russian vertically integrated holding company in the forest industry performing a full cycle of operations from logging to advanced wood processing, announces its audited consolidated financial results in accordance with International Financial Reporting Standards (IFRS) for 2019.
Key financial results for 2019
Mikhail Shamolin, President and Chairman of the Management Board of Segezha Group, said,
"In 2019, Segezha Group demonstrated the highest growth rate of revenue and OIBDA among its main international competitors. Increase of the production output, implementation of programmes to enhance operational efficiency, and strict control over cost reduction enabled us to improve the Group's financial performance despite the negative market situation seen in 2019.
The Company increased the output of absolutely all products in 2019. The output of paper and sawn timber grew by 3.4% and 9.8%, respectively, thanks to the improvement of production efficiency. The Group increased its plywood output by 41.1%. The increased was enabled by the second line of the Vyatka Plywood Mill in Kirov, which was commissioned in mid-2018 and reached its design capacity of 192,000 cu m a year in 2019.
The 2019 OIBDA margin stands at 24.0%, an increase of 1.2% from 2018. We were able to achieve one of the world's highest margins in the timber industry through active cost-optimising efforts throughout 2019.
The Group continued to implement its strategic development plans in 2019. A new industrial sack production line with a capacity of 80 million sacks per year was commissioned in Salsk. The Lesosibirsk plant started a project designed to drive pellet production from 70,000 to 100,000 tonnes per year. The construction of a new plywood mill with an annual capacity of 125,000 cu m of birch plywood began in Galich. In Sokol, we launched construction of a CLT facility with a capacity of 50,000 cu m.
Our own logging grew by 9.4% in 2019 to 4,908.8m cu m. The Group increased the share of own logging to 70%, which had a positive effect on curbing production costs of all products.
The Group paid out dividends in the amount RUB 3.8bn, and continued implementation of its large-scale investment programme with CAPEX totalling RUB 7.6bn, while maintaining the Net Debt/OIBDA ratio at a comfortable level of 2.8.
In 2019, the Group made substantial efforts to restructure and optimise its loan portfolio, and managed to bring the cost of financing down by 2.2% p.a. The Group was assigned a high credit rating of ruA-. In January 2020, the Company made a debut in the Russian debt market, having placed a RUB 10bn issue of three-year bonds with a coupon rate of 7.1%."
Key financials:
1 The Group's IFRS results for 2018 were adjusted in 2019 following completion of valuation of LLC Voloma Invest, which was acquired in June 2018. Before the adjustment, Segezha's 2018 OIBDA was RUB 13.1bn, OIBDA margin 22.7%, operating income RUB 8.5bn, and net loss RUB 0.05bn.
2 Net income / (loss) attributable to the members of Segezha Group
3 Total outstanding loans minus cash.
4 CAPEX is calculated as a sum of actual investment payments made throughout the reporting period, incl. VAT.
Источник: Segezha Group