Norske Skog: Better market balance
(Thomson Reuters ONE) -
An improvement in the market balance for newsprint and magazine paper, as a
result of permanent shutdowns in the industry, contributes to higher capacity
utilisation and an improved margin outlook in Europe.
- During the quarter, we have both announced and implemented an active capacity
management. We are now seeing the effects of this, through higher selling prices
in Europe. Capacity utilisation is currently high for our machines. We will
continue to actively cut costs and improve productivity, and assess our capacity
on an ongoing basis, says Sven Ombudstvedt, President and CEO of Norske Skog.
Alpha
Norske Skog's gross operating earnings (EBITDA) in the third quarter of 2013
were NOK 176 million, down from NOK 371 million in the third quarter of 2012.
The decrease was due to divestments and lower margins. Cash flow from operating
activities was NOK -91 million in the third quarter, and was weaker than the
third quarter of 2012. The decrease was due to lower operating earnings and
increased working capital.
- The total production capacity has been reduced in line with market demand. A
better balance between supply and demand has given room for price increases in
the second half of the year. This, combined with a favourable exchange rate
development and stable raw material costs, contributes to a brighter margin
outlook, says Ombudstvedt.
Net interest-bearing debt increased by NOK 277 million in the quarter, primarily
due to the weaker Norwegian krone and negative cash flow. Net interest-bearing
debt has increased by NOK 897 million so far this year, of which NOK 565 million
is due to the weaker Norwegian krone. The company repaid the revolving credit
facility of EUR 70 million in the quarter, thus removing uncertainty regarding
possible covenant breaches. Financial items consist primarily of NOK 160 million
in interest costs and NOK 87 million in unrealised currency losses.
Fixed costs were NOK 758 million in the third quarter, down from NOK 903 million
in the third quarter of 2012. A new long-term sales contract was negotiated in
the third quarter, and a fee was received in relation to cancellation of the
previous contract. This amount will be recognised as income quarterly over two
years.
Key figures, third quarter of 2013 (NOK million)
+-------------------------------------------+-------+-------+-------+------+
| |Q3 2013|Q2 2013|Q3 2012| 2012|
+-------------------------------------------+-------+-------+-------+------+
|Operating revenue | 3 353| 3 267| 4 115|16 592|
+-------------------------------------------+-------+-------+-------+------+
|Gross operating earnings (EBITDA) | 176| 214| 371| 1 485|
+-------------------------------------------+-------+-------+-------+------+
|Gross operating margin (%) | 5.2| 6.6| 8.9| 9.0|
+-------------------------------------------+-------+-------+-------+------+
|Gross operating earnings after depreciation| 40| 16| 140| 550|
+-------------------------------------------+-------+-------+-------+------+
|Restructuring expenses | 3| 0| -122| -118|
+-------------------------------------------+-------+-------+-------+------+
|Other gains and losses | -47| -662| -65|-1 009|
+-------------------------------------------+-------+-------+-------+------+
|Impairments | 0| 0| -403|-2 086|
+-------------------------------------------+-------+-------+-------+------+
|Operating earnings | -4| -647| -450|-2 663|
+-------------------------------------------+-------+-------+-------+------+
|Share of profit in associated companies | 9| 4| -83| -70|
+-------------------------------------------+-------+-------+-------+------+
|Financial items | -245| -358| 86| -117|
+-------------------------------------------+-------+-------+-------+------+
|Income taxes | 94| 142| 20| 69|
+-------------------------------------------+-------+-------+-------+------+
|Profit/loss for the period | -147| -859| -433|-2 781|
+-------------------------------------------+-------+-------+-------+------+
|Profit/loss before special items | -103| -197| 550| 432|
+-------------------------------------------+-------+-------+-------+------+
|Net cash flow from operating activities | -91| -48| 6| 982|
+-------------------------------------------+-------+-------+-------+------+
Active capacity management
The company's investment projects are progressing according to plan. AUD 84
million (NOK 480 million) is being invested in connection with the conversion of
a machine at Boyer in Australia from production of newsprint to catalogue paper,
and NOK 220 million is being invested at Saugbrugs in Norway to reduce energy
consumption and fixed costs. Both of these investments will have a positive
impact on margins.
As previously announced, Norske Skog will temporarily curtail production from
the end of December at one of two LWC machines (PM4) at Walsum in Germany, due
to low profitability. The annual production capacity of this machine is 225 000
tonnes.
As a result of improved margins for newsprint in England, PM2 at Skogn was
started up again in late August after two months of curtailment.
Norske Skog Singburi in Thailand was sold to a Thai industrial group for USD 33
million. The mill has an annual production capacity of 125 000 tonnes, and the
transaction will be completed upon settlement of the sales consideration in the
fourth quarter.
Outlook
Prices are expected to remain relatively stable from the third quarter to the
fourth quarter. We anticipate little change in the level of variable costs,
whilst fixed costs will decline somewhat as a result of ongoing cost reduction
programmes. A weaker Norwegian krone is supportive to underlying earnings.
Reported volumes, revenue and costs will be reduced following the divestment of
Norske Skog Singburi.
Presentation and telephone conference
The interim financial statements will be presented in DnB's offices in 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. Conference call details: +44 1296 480 180,
confirmation code: 996 531#
Interim financial statements
The interim financial statements are only prepared in English.
Oslo, 24 October 2013
Norske Skog
Communications and Public Affairs
For further information:
Norske Skog media: Norske Skog financial markets:
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.
Q3 2013 Norske Skog presentation:
http://hugin.info/105/R/1737782/582768.pdf
Q3 2013 Norske Skog press release:
http://hugin.info/105/R/1737782/582774.pdf
Q3 2013 Norske Skog quarterly report:
http://hugin.info/105/R/1737782/582767.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#1737782]
Unternehmensinformation / Kurzprofil:
Datum: 24.10.2013 - 07:02 Uhr
Sprache: Deutsch
News-ID 308823
Anzahl Zeichen: 8875
contact information:
Town:
Lysaker
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 157 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Norske Skog: Better market balance"
steht unter der journalistisch-redaktionellen Verantwortung von
Norske Skog (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
