bne IntelliNews – Russian forestry firm Segezha announces IPO price range, strong results

First Russian wood and paper group Segezha Group has set the price range for its next IPO on the Moscow Stock Exchange (MOEX) and reported strong results for the first quarter of this year on April 21.

The indicative price range was set between 7.75 RUB and 10.25 RUB per share during an IPO where an additional 32.4% of its current share capital would be offered to raise at least 30 billion RUB (390 millions of dollars). The IPO would establish the company’s market capitalization between 122.5 and 152.4 billion RUB (1.6 to 2 billion dollars).

Construction of books begins today and final pricing is expected to be announced on or around April 28, the company said in a press release.

Owned by the multi-industry conglomerate and listed in London System, Segezha developed the first Russian lumber, paper and pulp company in Russia, as bne IntelliNews described in a recent cover story “Russian green gold. “

Other major forestry companies dealing with softwood are Canada, which mainly focuses on the US market, and Scandinavia, which competes with Russia but has exploited its timber resources, leaving Segezha in a position to recoup much of it. demand for paper and pulp not only in Europe, but also in Asia.

Operating profit climbs by 80%

In the same press release, the company also posted very good financial results for the first quarter.

Revenue for the first quarter of this year is expected to be RUB 18.0-18.5 billion ($ 235- $ 241 million), an increase of 25.9% to 29.4% year on year respectively.

Operating profit before depreciation and amortization (OIBDA) for the period is expected to be between RUB 4.7 and 5.3 billion, an increase of 80.8% to 103.8% respectively.

The OIBDA margin for the first quarter of 2021 is expected to be between 25.4% and 29.4%, compared to 18.4% in the first quarter of 2020.

Revenue and OIBDA increased across all business segments in the first quarter of 2021 due to higher prices for key Segezha Group products.

“I am pleased with the positive response we have seen from the international investment community to the IPO offered by the Segezha group. This again underlines the attractiveness of the robust and highly efficient business model of the Segezha Group, built around full vertical integration, which underpins our main competitive advantages, including security of supply and overall control. of our production line and production costs, ”Mikhail Shamolin, chairman of Segezha Group, said in the press release.

“The Segezha Group has demonstrated robust growth for its key operational and financial indicators throughout its history, and our IFRS financial results for fiscal 2020 have been the strongest in our history,” added Shamolin. “The recovery in the markets for our products that we saw from the end of 2020 continued through the first months of 2021, and we expect this favorable operating environment to continue throughout the year. The market recovery from COVID, combined with strong drivers of long-term fundamental demand for our products, creates a solid foundation for further business expansion, driving revenue growth while maintaining strong margins . We anticipate that our current investment projects will increase packaging, CLT and bleached paper production volumes to help further grow our operating and financial results starting this year.

“Our IPO comes at a time when investors and the global public increasingly see sustainability as a key business issue and look to sectors such as the forestry industry. The Segezha Group is well positioned to become a leader among sustainable companies in Russia and to take advantage of the global sustainability trend, which will continue to strengthen in the future. I firmly believe that the Segezha Group represents a distinctive investment proposition and I look forward to demonstrating the strengths of our business model as well as our potential for future growth to investors, ”concluded Shamolin.


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