Norske Skog: Challenging market and lower debt
(Thomson Reuters ONE) -
Norske Skog continues to reduce debt and fixed costs despite challenging
markets. Net loss was significantly influenced by non-cash items such as
impairments and change in value of energy contracts.
Norske Skog had gross operating earnings (EBITDA) in the fourth quarter of 2012
of NOK 327 million, down from NOK 365 million in the third quarter. This decline
was due to weak seasonal effects and NOK appreciation. Gross operating earnings
for the full year 2012 were NOK 1 464 million, a reduction of NOK 51 million
from 2011, mainly due to lower production capacity after the closure of Norske
Skog Follum, sale of Norske Skog Bio Bio and Norske Skog Parenco.
Net profit before special items were NOK 432 million in 2012 compared to NOK 12
million in 2011. The net loss of NOK 2.8 billion for 2012 was heavily influenced
by NOK 3.2 billion in impairments, change in value of energy contracts and
restructuring expenses. Impairments reflect increased uncertainty about sales
price expectations. In addition, reassessment of Norske Skog's business in
Australasia and reduction in the expected useful life of Norske Skog Walsum
influenced impairments.
Cash flow from operating activities was NOK 382 million before net financial
payments in the quarter. Underlying interest expenses in 2012 fell from 2011 in
line with the reduction of net debt.
- Our operating earnings before special items have improved in 2012. Although
our mill portfolio was reduced by three mills in 2012, we have made
profitability improvements through cost input efficiencies and reduced working
capital and fixed costs. We have actively managed capacity to counter market
imbalances, says Sven Ombudstvedt, President and CEO of Norske Skog.
- The main task ahead is to create a better balance between supply and demand,
improve productivity and cut expenses to improve margins, says Ombudstvedt.
Key figures, fourth quarter 2012 (NOK million)
+---------------------------------------+-------+-------+-------+-------+------+
| |Q4 2012|Q3 2012|Q4 2011| 2012| 2011|
+---------------------------------------+-------+-------+-------+-------+------+
|Operating revenue | 3 689| 4 115| 4 970| 16 592|18 904|
+---------------------------------------+-------+-------+-------+-------+------+
|Gross operating earnings (EBITDA) | 327| 365| 503| 1 464| 1 515|
+---------------------------------------+-------+-------+-------+-------+------+
|Gross operating margin (%) | 8.9| 8.9| 10.1| 8.8| 8.0|
+---------------------------------------+-------+-------+-------+-------+------+
|Gross operating earnings after | | | | | |
|depreciation (EBIT) | 104| 134| 138| 529| -143|
+---------------------------------------+-------+-------+-------+-------+------+
|Restructuring expenses | 14| -122| -361| -118| -387|
+---------------------------------------+-------+-------+-------+-------+------+
|Other gains and losses | -228| -65| -532| -1 009| -201|
+---------------------------------------+-------+-------+-------+-------+------+
|Impairments | -1 649| -403| -86| -2 086|-1 969|
+---------------------------------------+-------+-------+-------+-------+------+
|Operating earnings | -1 758| -455| -841| -2 684|-2 701|
+---------------------------------------+-------+-------+-------+-------+------+
|Share of profit in associated companies| 6| -83| 203| -70| 198|
+---------------------------------------+-------+-------+-------+-------+------+
|Financial items | -49| 86| -358| -96| -629|
+---------------------------------------+-------+-------+-------+-------+------+
|Income taxes | -113| 20| 404| 69| 588|
+---------------------------------------+-------+-------+-------+-------+------+
|Profit/loss for the period | -1 914| -433| -592| -2 781|-2 545|
+---------------------------------------+-------+-------+-------+-------+------+
|Net profit/loss for the period | | | | | |
|excluding special items | -51| 157| 387| 432| 12|
+---------------------------------------+-------+-------+-------+-------+------+
|Net cash flow from operating activities| 247| 463| 409| 982| 455|
+---------------------------------------+-------+-------+-------+-------+------+
Net interest-bearing debt was reduced by NOK 1.8 billion in 2012, totalling NOK
6.0 billion at the year end. Net interest-bearing debt was reduced by NOK 264
million in the fourth quarter. Net interest-bearing debt has been reduced from
NOK 14 billion at the beginning of 2009 to NOK 6.0 billion in 2012, a decrease
of NOK 8 billion over the last four years.
- We have strengthened the company's financial position considerably through a
substantial reduction in our net interest bearing debt in recent years, says
Ombudstvedt.
Markets
The prices for our products remained relatively stable throughout 2012.
Newsprint Europe
Year-to-date demand for newsprint in Europe declined by 9% in 2012 compared to
2011. Gross operating margin was relatively stable in Europe, but negatively
impacted by exports and an appreciating NOK.
Newsprint outside Europe
Demand for newsprint in Oceania was weak, with a year-to-date decline of 13% in
2012 compared to 2011. Latin America saw a more modest decrease of 3%.
Magazine paper
An appreciating NOK adversely affected the export business. Year-to-date demand
for magazine paper in Europe declined by 6% in 2012 compared to 2011. A somewhat
better development for the smaller SC (uncoated) segment (minus 3%) compared to
the larger LWC (coated) segment (minus 8%) was largely due to product
substitution.
Active capacity management
Norske Skog ceased production at Norske Skog Follum in 2012 and one of two
machines at Norske Skog Tasman in January 2013. Norske Skog sold Norske Skog Bio
Bio and Norske Skog Parenco in 2012. As a consequence of these restructuring
activities, the total annual production capacity is reduced from 4.4 to 3.7
million tonnes (18%).
Capacity utilisation for the group in the fourth quarter was 87% compared to
90% in the third quarter with active capacity management. For 2012, capacity
utilisation was 88% (87% for 2011).
- The closures of five machines during 2012 have been difficult but necessary
decisions due to declining demand for our products. Unfortunately, these
decisions negatively affect the lives of our employees and their families. We
believe in our industry. Therefore, we are investing AUD 84 million in the
conversion of one machine at Norske Skog Boyer from newsprint to catalogue
paper. In addition, we invest NOK 220 million at Norske Saugbrugs that will
reduce energy consumption and fixed costs, says Ombudstvedt.
Outlook for 2013
Norske Skog expects that the operating environment will remain challenging, with
weak demand in both Europe and Australasia. Relatively stable costs and already
announced industry-wide capacity closures will be supportive. Active capacity
management will lead to low utilisation rates in the short term. Further NOK
appreciation remains an additional risk.
- The market is still challenging, but we maintain our efforts to improve the
group's competitive position and financial headroom. We will also work on
improving regulatory framework in Norway, says Ombudstvedt.
Presentation and conference call
The interim financial statements will be presented at DNB's offices in Bjoervika
in Oslo today at 08.30 CET. The presentation will be transmitted live on Norske
Skog's web site www.norskeskog.com. A recording of the presentation will also be
published shortly thereafter. An international telephone conference, open to
questions from the financial markets, will be held at 13:00 CET. The President
and CEO Sven Ombudstvedt and other members of corporate management will
participate in both of these events.
Telephone numbers:
+44(0)20 7136 2051 International Toll
800 56053 Norway Toll Free
0800 279 4841 UK Toll Free
1877 249 9037 USA Toll Free
Confirmation code: 5387434
Lysaker, 7 February 2013
Norske Skog, Communications and Public Affairs
For further information:
Norske Skog media: Norske Skog financial market:
Vice President Corporate Communication Vice President Investor Relations
Carsten Dybevig Tom Rogn
Mob: +47 917 63 117 Mob: +47 948 55 659
This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.
Q4 2012 Norske Skog quarterly report:
http://hugin.info/105/R/1676180/546226.pdf
Q4 2012 Norske Skog presentation:
http://hugin.info/105/R/1676180/546228.pdf
This announcement is distributed by Thomson Reuters on behalf of
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(i) the releases contained herein are protected by copyright and
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(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Norske Skog via Thomson Reuters ONE
[HUG#1676180]
Unternehmensinformation / Kurzprofil:
Datum: 07.02.2013 - 07:01 Uhr
Sprache: Deutsch
News-ID 227108
Anzahl Zeichen: 10536
contact information:
Town:
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Kategorie:
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