Segezha Group (MOEX: SGZH), a leading vertically integrated holding company in the timber industry performing a full cycle of operations from logging to advanced wood processing, announces its operating and interim consolidated IFRS financial results for the first six months of 2021. 

·         Revenue amounted to RUB 43 bn, a 37% increase year-on-year (yoy), driven by a rebound in global demand and higher average selling prices for the Group’s products.

·         OIBDA reached RUB 13 bn, an increase of 112% year-on-year, driven by revenue growth and control over key cost items;

·         OIBDA margin increased to 31% (+11 pp yoy);

·         Net profit was RUB 8 bn, compared to a loss of RUB 2 bn a year earlier, thanks to strong operating performance, growth in revenue and business margins, and the absence of a one-off loss on the revaluation of foreign currency loans last year.

Mikhail Shamolin, President of Segezha Group, said:  “We delivered stellar results in the first half of 2021. Revenue rose by 37% year-on-year on and OIBDA more than doubled, surging by 112%.

These results underscore both the robust pricing environment globally for our products and the strength of our vertically integrated business model. Against a backdrop where the cost of raw wood has increased sharply, we have benefitted tremendously from our own vast, high-quality forest resources. Strengths of our business include high level of supply of our own wood resources, which provides us with the ability to control this key cost input.

We continue to invest in the future growth of our business, both by modernising existing facilities and by adding new high-value-added production capacity. Capital expenditures across the Group in the first half of 2021 totalled RUB 9 bn and included the completion of the Sokol CLT plant, as well as the ongoing modernisation of the Segezha and Sokol PPMs. On-time and on-budget delivery of these projects demonstrates our strength in investment project execution.

We are committed to pursuing best-in-class environmental, social and governance standards, and are pleased that this week Sustainalytics assigned an inaugural ESG Risk Rating to Segezha that places us in the top quartile of companies in our industry."  

Rovshan Aliyev, Segezha Group’s Vice President for Finance and Investment, said: “In the reporting period, we were able to significantly reduce leverage by deploying proceeds from our IPO in the second quarter, with net debt down 42% year-on-year to RUB 29 bn as of 30 June 2021.

The IPO was one of the largest primary capital raises by a Russian company for a number of years, testifying to the strength of our investment case and the broader sector appeal to both domestic and international investors.

 Looking ahead, we expect favourable pricing for our products to persist, which, combined with a number of planned future investment projects, will result in strong operating and financial performance in 2021.”

[1] Net debt recorded as of 30 June 2021 and 31 December 2020, OIBDA for the last 12 months