IFRS net loss of Segezha Group for 3Q 2020 was RUB 3.4 billion against a profit of RUB 0.2 billion a year earlier, the company reported.
Revenue increased by 38% to RUB 19 billion from RUB 13.7 billion, OIBDA twice to RUB 5.1 billion from RUB 2.5 billion, operating profit 3.5 times to RUB 3.5 billion from RUB 1 billion.
According to Segezha Group's president Mikhail Shamolin referred to in the statement, the industry faced new challenges amid the COVID-19 pandemic this year, including a global economic slowdown and a downturn in business activity, lower demand for our products from the construction sector, higher prices for logistics services and a number of other factors.
In 3Q20, the company increased OIBDA across all Group segments: 1.5 times in Paper and Packaging, 8 times in Woodworking, more than twice in Plywood and Boards. This significant OIBDA growth was driven by higher sales of paper and sawn timber, as well as by an increase in the share of high-margin products in the Group's portfolio, the company's president noted.
The company's financial results were driven by significant year-on-year increases in average exchange rates versus the ruble, with the Euro rising by 20% and the US dollar by 14%.
In 3Q20, the Group continued to execute its investment program, while keeping the net debt to LTM OIBDA ratio at 3.3x. In 3Q20, capex totaled RUB 2.9 bn. The majority of investments were made to modernize existing production facilities in order to increase production volumes and reduce production costs. We invested RUB 0.5 bn into the implementation of the SAP S/4HANA system in order to enhance operational efficiency, competitiveness and further transform Segezha Group. The Company also invested RUB 0.4 bn in the construction of a CLT plant3 with capacity to produce 50,000 cu m of CLT panels, due to open in December 2020, Shamolin added.
Segezha Group is a major Russian vertically-integrated timber processing holding with a complete cycle of timber procurement and advanced wood processing operations. The holding includes timber, wood processing, pulp and paper facilities. The company's representative offices are located in 11 countries of the world, its products are sold in more than 100 countries worldwide. Employing ca. 13,000 people, the company is the biggest forest user in the European part of Russia, the total area of leased certificated forest reserves reaches 7.42 million ha, 85.7% of them (6.36 million ha) certified according to voluntary forest certification schemes.
