Segezha Group announces financial and operating results for Q1 2023

The Group’s revenue for Q1 2023 grew by 10% QoQ to RUB 18.7 billon primarily due to weakening of the rouble to the main foreign currencies rates: -17% for USD, -21% for CNY. The share of export revenue of the Group grew to 63% (+3 pp QoQ). Revenue declined by 42% as compared with the same period of last year, which derives from the structural transformation of target markets, lower product prices, as well as the rouble exchange rate strengthening: +15% for USD, +22% for CNY.

The adjusted OIBDA of Segezha Group for Q1 2023 grew by 9% QoQ to RUB 1.1 billon. OIBDA margin retained the level of Q4 2022, namely, 6%. OIBDA went down by 91% as compared with the same period of last year, which is caused by the structural transformation of target markets and, consequently, a high base of Q1 2022, a decrease in product prices, the strengthening of the rouble exchange rate, and significant growth of costs, especially logistics costs. The adjusted net loss of the Group for Q1 2023 reduced by 14% QoQ to RUB 3.8 billon vs RUB 4.42 billon in Q4 2022 and RUB 7.8 billon in Q1 2022.

As of 31 March 2023, total debt stood at RUB 123.2 billon (down 1% vs 31 December 2022). The debt portfolio at the end of Q1 2023 mainly consisted of liabilities denominated in roubles (92%). Net financial expenses for Q1 2023 totalled RUB (3.2) billon, thus remaining flat vs Q4 2022. As of 31 March 2023, the average weighted funding rate on borrowed funds was 9.9% per annum. As previously, the weighted average financing period is 2.2 years. As of 31 March 2023, cash and cash equivalents, including bank deposits with maturities of three months or less, stood at RUB 12.7 billon. The currency split of cash and cash equivalents was 48% in foreign currencies and 52% in roubles. Net debt made up RUB 110.5 billon, up 9% on 31 December 2022 due to the reduction of cash and cash equivalents. The net debt to LTM OIBDA ratio was 7.9х because of reduction in the estimated OIBDA for the most recent 12 months.

Capital investments for Q1 2023 stood at RUB 1.7 billon (+43% QoQ), of which 38%, or RUB 0.6 billon, were invested in the new projects of capacity expansion (primarily an upgrade of Sokol woodworking plant, RUB 0.4 billon); 31%, or RUB 0.5 billon, in maintenance of the existing assets; 31%, or RUB 0.5 billon, were invested in the exercise of an option for the repurchase of participation interests of banks in the Segezha West Project.