Norske Skog: High profit due to refinancing
(Thomson Reuters ONE) -
Norske Skog successfully completed in the first quarter a EUR 290 million senior
secured notes issue and bond exchange, extending the maturity profile. The
profit after tax was 663 million in the first quarter mainly due to gains on
exchanged bonds.
- After these refinancing transactions, we have strengthened and secured our
long-term capital structure by enhancing our liquidity position, realizing
immediate de-leveraging and extended debt maturities, said Mr. Sven Ombudstvedt,
President and CEO of Norske Skog.
- Already completed and announced capacity cuts in the industry should lead to
an improved market balance for newsprint and magazine paper in Europe effective
in second half of 2015. However, our effective cost reduction programs at every
mill and a weaker Norwegian krone support operating margins, particularly for
the Norwegian units, says Sven Ombudstvedt, President and CEO of Norske Skog.
Norske Skog's gross operating earnings (EBITDA) in the first quarter of 2015
were
NOK 192 million, slightly up from 190 million in the fourth quarter. EBITDA were
flat with a weak market for publication paper in Europe and low Asian export
prices for newsprint, outweighing positive foreign exchange rate effects and an
improvement at Boyer.
- We now see the positive effects of the conversion of one machine line from
newsprint to LWC at Boyer. We are the sole producer of publication paper in
Australia and New Zealand, which gives us a competitive edge in those markets.
Given the weak magazine paper markets in Europe, Walsum will be under strategic
review, says Sven Ombudstvedt, President and CEO of Norske Skog.
Key figures, first quarter of 2015 (NOK million)
+-----------------------------------------------+-------+-------+-------+------+
| |Q1 2015|Q4 2014|Q1 2014| 2014|
+-----------------------------------------------+-------+-------+-------+------+
|Operating revenue | 2 886| 3 208| 2 867|12 150|
+-----------------------------------------------+-------+-------+-------+------+
|Gross operating earnings (EBITDA) | 192| 190| 153| 801|
+-----------------------------------------------+-------+-------+-------+------+
|Gross operating margin (%) | 6.6| 5.9| 5.3| 6.6|
+-----------------------------------------------+-------+-------+-------+------+
|Gross operating earnings after depreciation | -1| 2| -28| 66|
+-----------------------------------------------+-------+-------+-------+------+
|Restructuring expenses | -3| -7| -2| -4|
+-----------------------------------------------+-------+-------+-------+------+
|Other gains and losses | 121| 29| 38| 39|
+-----------------------------------------------+-------+-------+-------+------+
|Operating earnings | 116| 24| 8| 102|
+-----------------------------------------------+-------+-------+-------+------+
|Share of profit in associated companies | -7| -4| 8| 1|
+-----------------------------------------------+-------+-------+-------+------+
|Financial items | 600| -858| -77|-1 357|
+-----------------------------------------------+-------+-------+-------+------+
|Income taxes | -46| -178| 16| -223|
+-----------------------------------------------+-------+-------+-------+------+
|Profit/loss for the period | 663| -1 017| -45|-1 477|
+-----------------------------------------------+-------+-------+-------+------+
|Cash flow from operations before net financial | -387| 641| 54| 948|
|items | | | | |
+-----------------------------------------------+-------+-------+-------+------+
The net profit of NOK 663 million in the first quarter of 2015 was significantly
impacted by gains on the bond exchange, mainly related to the recent refinancing
of the group. Net interest-bearing debt decreased by NOK 0.3 billion from year
end 2014, from NOK 7.4 billion to NOK 7.1 billion, with a gain on bond exchange
offsetting a negative cash flow. Cash flow from operating activities before net
financial items was NOK -387 million (NOK 641 million in Q4 2014) mainly due to
due to seasonality in working capital and opportunistic capturing of supplier
cash discounts.
Market and segments
Europe
Operating revenues were lower due to lower sales volume, more than outweighing a
positive foreign exchange rate effect. Cost of materials were flat compared to
last quarter, but fixed costs decreased slightly. Gross operating earnings
declined to NOK 95 million in the quarter, from NOK 129 million in the fourth
quarter, with a weak publication paper market in Europe.
Demand for newsprint and magazine paper in Europe decreased by 11% and 4%
respectively in the two first month of 2015 compared to the same period last
year. The mills reduced their capacity utilization to 82% (84% in Q4 2014) in
the quarter to avoid low margin sales and to support the company's commercial
policy.
Australasia
Compared to the previous quarter, operating revenue decreased due to seasonality
and low Asian export prices for newsprint. Variable cost per tonne in Q1 2015
was flat compared to the previous quarter. Fixed costs were higher in Q1 2015
than in the comparing periods, reflecting a weaker NOK to AUD and increased
operating expenses following the conversion.
Demand for newsprint in Australia decreased by around 10% in the first two
months of the year compared to the same period last year, while demand for
magazine paper was relatively stable. The mills reduced their capacity
utilization to 88% (93% in Q4 2014) to avoid low margin newsprint exports.
Active capacity management
Total annual production capacity for the group is 3.0 million tonnes following
the completion of the ramp-up at Boyer. In Europe the group capacity is 2.3
million tonnes, while in Australasia the capacity is 0.7 million tonnes.
Capacity utilization for the group in the first quarter was 83% compared with
86% in the fourth quarter, as a result of active capacity management.
- The market remains challenging. We have performed active portfolio management
of our machine capacity in the first quarter, and we will continue this policy
in the next quarters. Already announced permanent capacity cuts of more than
2.5 million tonnes in Europe and North-America in 2014 and 2015 in our product
segments should be supportive to the market balance, and thus future price
levels, says Sven Ombudstvedt, President and CEO of Norske Skog.
Outlook
The market balance for newsprint and magazine paper is expected to improve into
the second half of 2015, with all announced capacity closures in the industry
completed, giving room for price increases.
The group has a significant competitive advantage in Australia and New Zealand
being the sole domestic producer. Export markets for newsprint to Asia have been
challenging, but should improve with announced capacity closures in Russia.
Variable costs for the group are expected to remain relatively stable, while
fixed costs initiatives are set to continue.
Presentation and quarterly material
A recorded CEO presentation, the quarterly financial statements and the
presentation package are available on www.norskeskog.com. In connection with the
Q2 release on 16 July, it will be an opportunity for the press to participate in
a mill tour at Norske Skog Saugbrugs along with the corporate and local mill
management.
Oslo, 23 April 2015
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
Twitter: (at)Norske_Skog
Q1 2015 Norske Skog quarterly report:
http://hugin.info/105/R/1913721/683613.pdf
Q1 2015 Norske Skog presentation:
http://hugin.info/105/R/1913721/683614.pdf
Q1 2015 Norske Skog press release:
http://hugin.info/105/R/1913721/683612.pdf
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire 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 GlobeNewswire
[HUG#1913721]
Unternehmensinformation / Kurzprofil:
Datum: 23.04.2015 - 07:01 Uhr
Sprache: Deutsch
News-ID 387933
Anzahl Zeichen: 9897
contact information:
Town:
Lysaker
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 171 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Norske Skog: High profit due to refinancing"
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).
