Forchem Oyj - Annual Financial Report

FORCHEM PLC'S 2016 AUDITED FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS

Annual Financial Report
Free for publishing 28 April 2017, hour 15:30



FORCHEM PLC'S 2016 AUDITED FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF
DIRECTORS

During 2016, the market prices of raw materials have for the most part continued
to decrease, although during the last quarter of the year the price of Crude Oil
started  to increase. The low price level  is reflected in Forchem as a decrease
in  sales  price  as  well  as  a  decrease  in purchase prices. Compared to the
previous accounting period, the revenue of thegroup has decreased circa 18 % and
profitability  at EBITDA  level circa  16 %, but  the relative EBITDA margin has
remained  at 21 %. The group's  revenue for the whole  year is € 109 million and
operating profit € 17,6 million.

The  increase in crude oil price at  the end of 2016 has increased Forchem's CTO
cost  for  energy  related  contracts  which  has  had a negative effect also on
Forchem's margins. However, at the beginning of 2017, the increase has subsided,
and  prices have  even slightly  decreased. However,  the increase  in Crude Oil
price  may put some pressure on Forchem's refining margin also in the future, if
product prices stay soft.

The  demand for Forchem's products continues to be robust. The company continues
to  develop its business  by new innovations,  new products, and co-operation in
sales  and sourcing.  Turnover is  expected to  increase slightly, due to market
prices.  Relative profitability in terms of  EBITDA margin is expected to remain
steady.

The  company's business environment is significantly affected by the development
of  the global  economy. Main  parameters are  price of mineral oil, dollar/euro
exchange  rate, and  price development  of substitute  Gum Rosins  and vegetable
oils.

The  raw material used  by the company,  CTO, is sourced  from the forest (pulp)
industry,  which  has  pressure  to  develop  new  sources  of  income from side
products,  and residual biomass from logging.  There is some uncertainty related
to  the availability and  price of CTO  if the use  of CTO in biofuels increases
drastically, due to recent classifications and changes in tax treatment.

This  release is a summary of Forchem Plc's 2016 Financial Statements and Report
of  the Board of Directors. The whole report including the tables is attached to
this release and it is available at www.forchem.com/investor_area.


For more information:

Forchem Plc
Henrik Lindegrén, CFO, p. +358 44 032 1075, henrik.lindegren@forchem.com
Risto Näsi, CEO, p. +358 50 315 1585, risto.nasi@forchem.com

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Attachments:

Forchem_Financial Statements 2016.pdf