Norske Skog: Quarterly report postponed, good Q2 performance
(Thomson Reuters ONE) -
Due to a comprehensive process related to change of auditor, Norske Skog
postpones the publication of the full figures for the second quarter until
Wednesday 20 July. BDO, an international auditing and consulting company with
branches in 154 countries, is about to finalize an agreement to audit Norske
Skogindustrier ASA. Norske Skog will today only publish gross operating profit,
cash flow, net interest bearing debt and liquidity for the second quarter of
2016. Gross operating profit for the second quarter was NOK 335 million, which
is the best gross operating earnings since the third quarter of 2012.
New auditor
Norske Skog has previously communicated through various press releases and
announcements that EY and Norske Skog have agreed that a change of auditors will
be most beneficial to both parties. In the process of finding a new auditor,
Norske Skog has been in dialogue with several auditing firms. From this process,
the Board of Norske Skog has decided to recommend that the General Assembly
choose BDO as new auditor. The election of new auditor will take place at an
extraordinary general meeting within 10 August, which is the deadline set by the
Register of Business Enterprises (Foretaksregisteret) to register new auditor.
As a condition for accepting the audit assignment, BDO has set forth certain
assignment conditions including material write-downs of the asset portfolio.
Due to extraordinary additional work in connection with the impairments of the
company's asset portfolio, the final quarterly consolidated financial statements
including notes and the report of board of directors will be published on
Wednesday 20 July. Today's press release is therefore an update on operations
and markets.
Operational development and gross operating earnings
Operations at all factories were better in the second quarter compared to the
first quarter. Gross operating earnings (EBITDA) in the second quarter 2016 was
NOK 335 million, which was a significant increase from NOK 242 million in the
first quarter and a significant improvement of NOK 138 million second quarter
last year. Gross operating earnings (EBITDA) for the first six months totaled
NOK 577 million. Norske Skog had guided for a gross operating earnings in the
first half above NOK 500 million.
- As announced in the first quarter, the European market shows signs of clear
improvements. We are now seeing the effects of own cost reductions and capacity
closures in Europe and North America in recent years. Our mills have been
operating close to full capacity utilization throughout the first half. The need
for active capacity management will be less in the second half than in the
corresponding period previous year. Seasonal variations are in 2016 expected to
provide higher sales volumes in the second half than in the first. The
improvement market balance will be supportive to maintain margins at the same
level as in the first half, says Sven Ombudstvedt, CEO of Norske Skog.
Cash flow from operating activities before net financial items was NOK 321
million compared with NOK 285 million in Q1 2016. The cash balance at the end of
the quarter was NOK 725 million.
In the second quarter, Norske Skog completed a comprehensive refinancing of the
debt, which increased the average maturity of existing bonds to 6 years and
significantly reduced the debt. Net interest bearing debt was reduced by almost
NOK 1.7 billion from the end of the first quarter, from NOK 8.1 billion to NOK
6.4 billion, as a result of debt restructuring in connection with the exchange
offer, the repair equity offering and unrealized (without cash effects) currency
effects.
Key figures, second quarter of 2016 (NOK million)
+-----------------------------------------------+-------+-------+-------+------+
| |Q2 2016|Q1 2016|Q2 2015| 2015|
+-----------------------------------------------+-------+-------+-------+------+
|Operating revenue | 2 891| 2 980| 2 786|11 538|
+-----------------------------------------------+-------+-------+-------+------+
|Gross operating earnings (EBITDA) | 335| 242| 138| 753|
+-----------------------------------------------+-------+-------+-------+------+
|Gross operating margin (%) | 11.6| 8.1| 5.0| 6.5|
+-----------------------------------------------+-------+-------+-------+------+
|Cash flow from operations before net financial | 321| 285| 89| 66|
|items | | | | |
+-----------------------------------------------+-------+-------+-------+------+
|Net interest bearing debt | 6 353| 8 043| 7 531| 8 523|
+-----------------------------------------------+-------+-------+-------+------+
Market outlook
The market balance for publication paper in Europe is favourable due to a benign
demand development and capacity closures. Newsprint prices in the UK increased
into the second half of 2016 reflecting depreciation of the British pounds
following Brexit referendum. The European SC- market is benefiting from a strong
dollar and capacity closures in the US. The Asian export market for newsprint,
of increasing importance to Norske Skog due to a smaller domestic market in
Australasia, is encouraging with price improvements.
Favourable energy costs for our European mills and efficiency measures at all
mills are expected to reduce variable costs by 2-3% per tonne in 2016. Fixed
costs initiatives continue at all mills towards a run-rate group level of NOK
600 million per quarter by year-end 2016. Ongoing growth initiatives are
expected to contribute marginally to gross operating earnings this year but to
reach full run-rate potential within a timeframe of 3-4 years.
Growth projects at Golbey
The sodding ceremony for the construction of the Golbey biogas plant will be
made on July 13. The project at Golbey will be financed locally. The plant will
be connected to the biological-chemical treatment plant and be dimensioned to
absorb all organic waste from the paper production. The plant is expected to be
at full operation during 2017. At the same time, Golbey launches new projects,
which will combine synergies from the existing mill and the nearby industrial
cluster, which is developed in recent years.
Presentation and quarterly material
The reporting of the final quarterly figures will occur on 20 July at 07.00 CET.
A recorded webcast of the CEO presentation, the quarterly financial statements
and the presentation package will be available on www.norskeskog.com.
The press and investor gathering at Golbey on July 13 at 11:00 will be conducted
as planned. The planned investor meetings in London and New York will
unfortunately be postponed until after the summer.
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
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#2027992]
Unternehmensinformation / Kurzprofil:
Datum: 12.07.2016 - 12:45 Uhr
Sprache: Deutsch
News-ID 482845
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contact information:
Town:
Oslo
Kategorie:
Business News
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