Norske Skog: Challenging markets
(Thomson Reuters ONE) -
Lower margins in the quarter were due to lower selling prices and seasonal
fluctuations in demand. Norske Skog is meeting this challenge through the
closure and conversion of paper machines. Price increases are expected during
the second half as a result of the considerable capacity closures that have been
announced. Norske Skog continues to cut costs and improve productivity.
Investments are also being made to improve profitability on certain machines.
There is also focus on improving the regulatory environment in Norway.
Norske Skog had gross operating earnings (EBITDA) in the first quarter of 2013
of NOK 174 million, down from NOK 385 million in the first quarter of 2012.
The decline was mainly due to lower prices. Negative cash flow from operating
activities of NOK 106 million in the first quarter, which was significantly
weaker compared to the first quarter of 2012. The decrease was due to weaker
margins, restructuring activities in Australia and seasonally increased working
capital.
Net interest-bearing debt increased by NOK 461 million in the quarter, due to
negative currency effects and cash flow. The level of fixed costs was NOK 800
million in the first quarter, down from NOK 1 026 million in the first quarter
of 2012.
- The result was weakened by lower prices and weak demand. Permanent capacity
cuts in Europe of more than a million tonnes have been announced this year. This
constitutes a significant share of the production capacity in Europe and will
provide a better market balance and increased prices. We are continuing our
efforts to improve productivity and reduce costs in order to improve margins,
says Sven Ombudstvedt, President and CEO in Norske Skog.
- The level of variable costs, mainly fibre and energy, was stable compared to
the previous quarter, and lower compared to the same period in 2012. We are
satisfied that the annual level of fixed costs has been reduced by over NOK 800
million in 12 months, says Ombudstvedt.
Key figures, first quarter of 2013 (NOK million)
+-------------------------------------------+-------+-------+-------+------+
| |Q1 2013|Q4 2012|Q1 2012| 2012|
+-------------------------------------------+-------+-------+-------+------+
|Operating revenue | 3 186| 3 689| 4 411|16 592|
+-------------------------------------------+-------+-------+-------+------+
|Gross operating earnings (EBITDA) | 174| 332| 385| 1 485|
+-------------------------------------------+-------+-------+-------+------+
|Gross operating margin (%) | 5.4| 9.0| 8.7| 9.0|
+-------------------------------------------+-------+-------+-------+------+
|Gross operating earnings after depreciation| -24| 109| 134| 550|
+-------------------------------------------+-------+-------+-------+------+
|Restructuring expenses | 0| 14| -11| -118|
+-------------------------------------------+-------+-------+-------+------+
|Other gains and losses | -153| -228| -670|-1 009|
+-------------------------------------------+-------+-------+-------+------+
|Impairments | 0| -1 649| -35|-2 086|
+-------------------------------------------+-------+-------+-------+------+
|Operating earnings | -178| -1 753| -582|-2 663|
+-------------------------------------------+-------+-------+-------+------+
|Share of profit in associated companies | 5| 6| 8| -70|
+-------------------------------------------+-------+-------+-------+------+
|Financial items | -333| -54| 104| -117|
+-------------------------------------------+-------+-------+-------+------+
|Income taxes | 124| -113| 128| 69|
+-------------------------------------------+-------+-------+-------+------+
|Profit/loss for the period | -381| -1 914| -343|-2 781|
+-------------------------------------------+-------+-------+-------+------+
|Profit/loss before special items | -228| -51| 373| 432|
+-------------------------------------------+-------+-------+-------+------+
|Net cash flow from operating activities | -106| 247| 267| 982|
+-------------------------------------------+-------+-------+-------+------+
Active capacity management
The company's investment projects have progressed according to plan in the
quarter. We are investing AUD 84 million (NOK 480 million) to convert a machine
at Boyer in Australia from production of newsprint to catalogue paper, and we
are investing NOK 220 million at Saugbrugs to reduce energy consumption and
fixed costs, says Ombudstvedt.
Norske Skog has announced a temporary production stop at Skogn in Norway. In
addition, there will be a smaller reduction in the remaining production at
Tasman in New Zealand. The other machine at the mill was permanently closed on
9 January 2013.
Outlook for 2013
Norske Skog expects that the operating environment will remain challenging
through the first half of 2013, with weak demand in both Europe and Australasia.
Relatively stable costs through the year and positive price impacts from
industry-wide capacity closures will be supportive in the second half.
Presentation and telephone conference
The interim financial statements will be presented in DnB's offices at Bjørvika
in Oslo today at 08.30 CET. The presentation will be transmitted live on Norske
Skog's website www.norskeskog.com.
A recording of the presentation will be published shortly afterwards. 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.
Conference call details: +44(0)20 7136 2055 Confirmation code: 3074890
Interim financial statements
The interim financial statements are only prepared in English.
Lysaker, 25 April 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.
Q1 2013 Norske Skog press release:
http://hugin.info/105/R/1696052/558410.pdf
Q1 2013 Norske Skog quarterly report:
http://hugin.info/105/R/1696052/558416.pdf
Q1 2013 Norske Skog presentation:
http://hugin.info/105/R/1696052/558418.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Norske Skog via Thomson Reuters ONE
[HUG#1696052]
Unternehmensinformation / Kurzprofil:
Datum: 25.04.2013 - 07:02 Uhr
Sprache: Deutsch
News-ID 252707
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contact information:
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