Kotkamills Group Oyj - Interim report (Q1 and Q3)

Kotkamills Group Oyj: KOTKAMILLS INTERIM REPORT FOR JANUARY - MARCH 2016

Kotkamills Group Oyj

STOCK EXCHANGE RELEASE

31 May 2016, at 4 pm (CET + 1)



This is a summary of the January - March 2016 interim report. The complete
report is attached to this release and is also available at
www.kotkamills.com/fi/kotkamillsgroup/keyfinancials



KOTKAMILLS INTERIM REPORT
January-March 2016 (1-3/2015)

The revenue of continued operations was MEUR 51,0 (0,0).

The operating profit of continued operations was MEUR -2,1 (28,8).


Events in January-March 2016

According to the plan, the production of magazine paper discontinued in January
and the conversion of paper machine 2 to board machine was started.

Demand of Industrial Products segment's products continued to stay at a good
level. Consumer Boards had no deliveries during the reporting period.


Key figures

The business of Magazine Papers was classified as a discontinued operation in
January 2016 and thus the net result of the business of Magazine Papers is
presented in the statement of profit or loss under "Profit (loss) from
discontinued operations" separately from continuing operations for all periods
presented.

The Kotkamills Group Oyj became the parent company on 24 March 2015, when the
Company acquired the entire share capital of Kotkamills Oy, thus the comparison
quarter, Q1 2015, does not include business activities of continued operations.
The Group recognized a gain, i.e. negative goodwill, of EUR 30,5 million on the
acquisition of Kotkamills Oy. The gain has been recognized in the other
operating income in Q1 2015.

 (IFRS)                             1-3/2016 1-3/2015 1-12/2015

 Continued operations

 Revenue, EUR million               51,0     0,0      146,4

 EBITDA, EUR million                -0,7     28,8     46,0

 Operating profit, EUR million      -2,1     28,8     40,9

 Operating profit/ Revenue (%)      -4,1     -        27,9



 Group Total

 Return on equity (%)               -20,9    119,4    122,4

 Equity ratio (%)                   11,5     13,0     13,1

 Equity ratio, adjusted (%)*        45,3     44,2     44,3

 *Equity includes shareholder loans


The Group monitors capital using an equity ratio and an adjusted equity ratio
based on the financial covenants, which is total equity added with shareholder
loan and divided by total assets. The Group's policy is to keep the adjusted
equity ratio above 30%. There have been no breaches of the financial covenants
of equity ratio in the current period.


Events after reporting date

On May 18, 2016, the Company informed that the construction work of the new BM
2 of Kotkamills Oy has progressed to the very advanced stage. The start-up of
the new board machine is estimated to take place during July 2016. The earlier
target set already in 2015 was last week of June 2016.

On May 20, 2016 the Company informed, that Kotkamills Oy has signed a contract
of approximately EUR 20 million with a Nordic financial institution concerning
sale of trade receivables of the company to the financial institution (on an
ongoing, non-recourse basis on customary market terms). The entry into the
transaction is expected to increase the efficiency of the Kotkamills Group's
working capital management.


Outlook for 2016

The revenue and the profit for the second quarter of 2016 will decrease due the
ending of the magazine paper production, maintenance shutdown of Kotka mill in
May and the investment shutdown until July 2016. Market of the other continued
operations' businesses is expected to be at least at the same level as in the
last year, but ongoing uncertain economic situation in Europe and geopolitical
risks may have weakening impact on demand. Also present currency rates and
energy price levels are expected to support the Group's performance, but
possible increases in raw material prices could adversely impact the Group's
profit development.


Kotkamills Group Oyj
Board of Directors


For additional information, please contact:

CFO Petri Hirvonen, tel.+358 40 571 0834, petri.hirvonen@kotkamills.com

DISTRIBUTION:
Nasdaq Helsinki Ltd
Key media
www.kotkamills.com


Kotkamills Group in brief

Kotkamills is a responsible partner that delivers renewable products and high
quality performance to its customers' processes via product innovations created
from wood, a renewable raw material. Kotkamills' key brands include Absorbex®
and Imprex®, both innovative laminating paper products for the laminate and
plywood industries. Moreover, Kotkamills also offers ecological, technically
sound and visually attractive wood products for demanding joinery and
construction. The start-up of the new board machine producing totally recyclable
Consumer Board products is due in 2016. www.kotkamills.com

Disclaimer
The information contained in this release shall not constitute an offer to sell
or the solicitation of an offer to buy securities of Kotkamills Group Oyj in any
jurisdiction.

[HUG#2016706]

Attachments:

Kotkamills Group Oyj Interim Report Q1-2016.pdf