Hello, welcome to this Q4 2025 presentation of Borgestad's results. Please use the Q&A function if you have any questions, and we will take that at the end. With that, I leave the word to Pål and Bendik.
Thank you. Thank you for hosting us. For a second year in a row, Borgestad is distributing a dividend. The board of directors has approved to distribute NOK 0.5 per share in dividend for 2025. The dividend will be paid out to shareholders the 6th of March, and is a repayment of paid-in capital. The distribution reflects what has been communicated from Borgestad over the last years. Borgestad shall be a shareholder-friendly company who prioritize distribution of dividend. Q4 is a quarter where the seasonality sets in for Borgestad. Through Höganäs Borgestad and activity and results within the group decreases. This is also the fact for Q4 25. Historically, Q4 has been a quarter with material differences from year to year, but for Q4 25, the overall results is that Borgestad are relatively stable year-on-year.
2025 has been a year with high uncertainty. This uncertainty will probably continue going forward. For Höganäs Borgestad, this uncertainty has been re-reviewed, especially in the Swedish market. Höganäs Borgestad has seen a slowdown across several industries and segments, with multiple project postponements and a scale-down activity. In Norwegian, ferroalloy market recently introduced tariff barriers between the European Union and Norway has added uncertainty to the broader fair market, which is expected to have short-term negative impact for Höganäs Borgestad. To establish a stronger foundation for future development and profitability, Höganäs Borgestad implemented cost-cutting measures and organizational adjustments throughout 2025. The underlying performance of the business remains solid, even as market conditions continue to be somewhat challenging. Despite these uncertainties, the group continued to invest in the future. During 2025, Höganäs Borgestad completed 2 acquisitions.
Mcotec AB, a Swedish flue gas cleaning company, closed in June 25. Now in Q4, Norsk Ildfast Gjenvinning AS, a Norwegian company in Mo i Rana, focusing on recycling materials. Both transactions are expected to generate long-term shareholder value. Bendik will touch upon these later in the presentation. Borgestad Group reports an adjusted full-year profit before tax of NOK 51 million, a decrease from 2024. The decrease full year for full year profit before tax is due to slower start of the year for in 2025 and the challenging market conditions. The positive trend during the year is that the H2 of the year has been better than same period 2024.
Borgestad's shopping center, Agora Bytom, maintained its positive momentum in connection with leasing. Agora Bytom ended 2025 with an occupancy rate at 96.2%, based on signed leases. During 2025, Agora Bytom has increased the occupancy rate of about 1.7% for the year. Before going into details, we'll start with a brief introduction to Borgestad, for those of you who are not familiar with who we are and what we do. Borgestad is a company with a lot of history, with industrial and shipping routes dating back to the early 1900s. Over the years, we have now evolved into an industrial investment company, currently invested in commercial real estate and refractory industry. Our current main priority is to improve and maximize the value of existing portfolio.
Looking ahead, we aim to take positions in each segments with consolidation potential, where we can see that we can make a difference. We operate as active owners, meaning that we work closely and support our portfolio companies to drive operational improvements. A key part of our strategy is to leveraging the networks and expertise of our board of directors to identify and capitalize on new opportunities. Our current portfolio consists of 2 key assets: Agora Bytom, a fully owned shopping center in Poland, and the refractory supplier, Höganäs Borgestad, in which we hold a stake of 69.7% ownership. Agora Bytom is a modern shopping center located in the city of Bytom in Poland. The center is 52,000 square meter of gross area with nearly 34,000 square meters of leasable space.
With close to 5 million annual visitors, Agora Bytom holds a leading position in its local market. Höganäs Borgestad is a manufacturer and supplier of high-quality refractory products and installation services, serving industries that rely on high temperature processes such as steel, cement, and pulp and paper. With a strong presence in Norway, Sweden and Finland, Höganäs Borgestad is the market leader in the Nordic region for refractory businesses. Let's go into Agora Bytom and some more details. Agora Bytom continues the positive trend, with improvements, driven by revenue growth and EBITDA growth for full year 2025. EBITDA increased from NOK 41.3 million in 2024 to NOK 42.3 million in full year 2025. Q4 has been some a bit weaker, dragged down by some one-offs and with some changes for tenants in the quarter.
Despite a bit weaker Q4, 2025 has been a good year for Agora Bytom for overall performances. Agora has a positive momentum on signing leases and have had by end of 2025, an occupancy rate of 96.2%. As part of the increase in occupancy, also, the total area for commercial spaces are increased by converting common areas to leasable areas. This is something we will focus on further to try to increase further on leasable areas. Agora Bytom had a new year with a lot of changes in relations to tenants. The development in tenant base in Agora Bytom is a trend of increased commercial attractiveness and better tenant quality. The new signed leases will open during H1 of 2026 and will increase rental income and profitability going forward.
First, I will continue to focus on increasing rent levels and occupancy, and change out tenants with low rents, with better commercial attractiveness and higher rents. As of December 31st, 2025, the debt stands at EUR 28.9 million, maintaining a sustainable financial position. Tenant turnover at Agora Bytom increased by 6.6% in the Q4 2025, compared to the same period in 2025. Number of visitors are relatively stable. The increase in turnover reflects a higher spending pattern among visitors, contributing to improved tenant performances for the tenants in Agora Bytom. The Polish economy growth has been resilient and above the EU average growth despite the trade turmoil and the ongoing war in neighboring Ukraine.
Borgestad expects continued positive development in consumer spending in Poland, and this should lead to better performance for Agora Bytom. Agora Bytom benefits from a diverse tenant base and a healthy weighted average, an expired lease term of about 4 years, ensuring low contract duration risk and high visibility for the years ahead. These expirations are well spread over time, with 1st due date for top tenants in 1st quarter 2028. Local management is actively engaged in ongoing negotiations with both existing and potential new leases. This to strengthen the center for the future. Bendik?
Thank you, Pål. Höganäs Borgestad concluded 2025, with a quarterly results in line with last year's Q4, with revenues of 228 million NOK and an adjusted EBIT of 4.5 million NOK. For the year as a whole, we delivered an EBIT of 64.7 million NOK, down from 81.1 million NOK last year. This drop was as Pål mentioned, largely explained by a drop in revenue in the H1 of 2025, with considerably less project activity in the low season from January to April. Our subsidiaries in Norway and Finland continued to perform at a high level, whereas we now also see good signs of improvement in Sweden, but we still have a lot of things to improve.
As Pål mentioned, it's quite clear that we are facing challenging market conditions with customers within several industries, having temporary shutdowns or postponed projects, which in the short term, is implying reduced utilization among all Nordic refractory actors, which inevitably is affecting us negatively. We have seen this in Sweden and we now also see this in Norway, among ferroalloy producers, which are having product production shutdowns, partly explained by the recently introduced tariffs on Norwegian ferroalloy into the EU. Also, explained by the unusually high electricity prices in the northern part of Norway, which is drastically reducing the gross margins for the ferroalloy producers. Nevertheless, we remain committed to our medium-term EBIT targets of 10% for the group as a whole.
As Pål mentioned, in December 2025, we acquired Norsk Ildfast Gjenvinning Drift, a company recycling refractory materials located in Mo i Rana, close to both existing and potential customers in the northern region of both Norway and Sweden. We have a group ambition of increasing our share of recycled materials in our products while maintaining the same high quality. In order to ensure the same high product quality, we will make some smaller investments in the production plant in Mo i Rana, and we already have activities ongoing to secure a positive development for the production plant and the profitable growth in the department in Mo i Rana.
As mentioned in previous presentations, the Nordic refractory market is highly seasonal, with activity being low during the 1st quarter, while picking up in the 2nd and peaking in the 3rd quarter. Following a slow start to 2025, activity levels increased as anticipated in the 2nd quarter and continued to improve throughout the 3rd quarter, which was the best quarter in the history of Höganäs Borgestad. In the 4th quarter, both revenue and EBIT matched the previous year's figures, although this was slightly below our internal expectations for the 4th quarter. The shortfall compared to our internal targets for the quarter was mainly due to certain fixed price projects, which yielded lower results than projected, and we have since implemented measures to reduce the risk of doing similar mistakes in the future.
Looking at our trailing 12 months results, our adjusted EBIT margin remained stable at 6.2%. Although several customers have postponed projects which are negatively impacting our business in the short term, we are thinking long term about how we act, and we believe in maintaining a position as a trusted partner for our clients. Rather than downsizing in direct proportion to the declining revenue, we are committed to retaining our capabilities. This will position us to capitalize on increased market activity, which we anticipate in the coming years. That said, we have strengthened our focus on profitability and cost control across all 3 countries to reduce general redundancy, aiming to improve our results also in the short term. We expect positive progress despite challenging market conditions, as we work toward our midterm EBIT target of 10%.
Finally, a short update on the Bjuv sale leaseback agreement. For those of you who are not familiar, at the end of 2023, Höganäs Borgestad entered into an agreement to sell 2 properties in Bjuv in Sweden to the local municipality. The transaction included an option for us to lease the properties back for up to 5 years, providing flexibility as we plan to relocate production. Following a complaint about the sale price filed by a local resident, the Administrative Court in Malmö rejected the transaction in March 2025, citing lack of documentation supporting the transaction value. The municipality responded by appealing the decision in April, adding additional supporting documents. In June, the court agreed to reconsider the case, and ultimately, in December 2025, the Court of Appeal ruled in favor of the transaction, allowing the sale to move forward.
In January this year, the same local resident appealed the decision once more, and the Supreme Court is now set to review the case. We anticipate that the court will reach a final verdict within 4 to 6 months, meaning that we should expect a final decision by this summer. We remain confident that this transaction will proceed, and once the transaction is completed, we will once again start planning for future production, which has been put on hold due to this legal process.
Going to the financials and group overview. Turning to the financials for Borgestad Group as a whole, we start with P&L. Revenue is stable in Q4 2025, but has a decrease for full year 2025 compared to the same period in 2024. The full year decrease is due to market conditions within the refractory market. Adjusted EBIT decreases in Q4 compared to Q4 2024, due to increased depreciation for Agora Bytom and the fact that in Q4 2024, the sale of the former headquarter of Borgestad were included, with a gain of approximately NOK 5 million.
For adjusted EBIT, full year, the decrease is as expected, due to the slow Q1 in 2025 compared to 2024, and also for full year 2025, the increased depreciation for Agora Bytom is affecting the numbers. Looking at the balance sheet, working capital increased to NOK 241.4 million from NOK 197 million as of December 31st, 2024, mainly driven by increased trade receivables and inventory within Höganäs Borgestad. Going forward, Höganäs Borgestad will focus on decreasing working capital through different measures. Per the December 31st, total interest-bearing debt stood at NOK 457.5 million, while net interest-bearing debt was at NOK 304.9 million. The property in view remains classified as held for sale, pending the expected court decision in near term future.
Borgestad expect that the process will finalize in 2026, with closing of the transaction, of course, conditional of positive outcome from the Supreme Court decision. Net cash flow from operating activities for a period was positive with NOK 33.7 million. Cash flow from investing activities was negative, with NOK 46.1 million after closing 2 acquisitions and reinvestments in core business. Per December 31, available liquidities stood at NOK 212.6 million, including NOK 75.7 in undrawn credit facilities, meaning that Borgestad has a good liquidity situation. To summarize, Borgestad delivered strong underlying financial results for full year 2025.
Borgestad has invested for a future, with 2 acquisitions completed in 2025, and cash flow remains solid and net debt at a sustainable level, giving the possibility to distribute a dividend of NOK 0.5 per share, dividend for 2025. As communicated in the start of the presentation, the dividend will be payable already at the 6th of March and is repayment of paid-in capital. Borgestad expects to continue the good development going forward. Q1 2026 will be probably according to Q1 2025, while FY 2026 is expected to be somewhat better on EBIT level than FY 2025. Thank you.
Thank you, Pål and Bendik. We will go over to the Q&A, so please use the function if you would like to ask any questions. I can start with a question here regarding what you mentioned in the Q3 report. You mentioned a non-cash, one-off effect that would be implemented in Q4 that you did not mention today. Can you give a comment on that?
Yeah. That is a bit technical, but we are in a liquidation process of a company in Asia within Höganäs Borgestad Group. It was expected that the liquidation would give a negative PNL effect of approximately 44 million NOK, while the equity would not be influenced and have 0 effect. Since the liquidation effect process has taken longer time than expected, we have done some changes to how or we have converted internal debt to equity and by that excluded the potential PNL effect.
With the same effect as communicated in Q3 report, it will have no effect on the cash or, the equity, portion.
Okay. Thank you very much. We do not have any further questions, so I think we round it off from here. Thank you all for listening in.