Rottneros' Posts First Quarter Loss on Lower Pricing for Pulp
"The sharp decline in prices has clearly had an impact on the company's turnover, as volumes have largely remained the same." – Ole Terland, President and CEO, Rottneros.
April 18, 2013 - Swedish market pulp producer Rottneros today reported first quarter 2013 financial results. Ole Terland, the company's President and CEO said that although volumes in the first quarter of 2013 remained the same as in the first quarter of 2012, lower pricing for the company's pulp grades negatively impacted earnings.
"Global supplies of long-fibre market pulp increased by almost four per cent in 2012. Delivery volumes remained the same during the first quarter of 2013, both compared with the preceding quarter and the same quarter of the previous year. Prices according to PIX were USD 820 per tonne for NBSK compared with USD 830 per tonne last year. The market was consequently stable," Terland said.
"However, prices for Swedish exporters like Rottneros have fallen by SEK 325 per tonne since the first quarter of 2012, though they remained relatively stable for the first quarter of this year. The sharp decline in prices has clearly had an impact on the company's turnover, as volumes have largely remained the same, but has a relatively minor impact on the result. This can be explained by the reduction in our variable costs, as our fixed overheads remain largely unchanged."
- Income after net financial items amounted to SEK -4 million for the first quarter of 2013 compared with SEK 0 million for the fourth quarter of 2012 and SEK -4 million for the first quarter of 2012.
- The USD price for chemical pulp is rising and price increases to USD 860 per tonne have been announced. In spite of this, the average price in Swedish kronor for the first quarter of 2013 was in line with the fourth quarter of 2012 due to the weak dollar rate.
- Cash flow from operating activities amounted to SEK 21 (-32) million for the first quarter of 2013. This positive cash flow is largely explained by a reduction in working capital.
- Arctic Paper holds 54% of the shares in Rottneros and the bid process has been concluded
"The company, including staff, customers and suppliers, have been in a state of uncertainty over the past quarter, owing to the bid process that prevailed as a result of the offer to exchange Rottneros shares for shares in Arctic Paper SA. The bid process has now been concluded; there was no merger. A new board was elected at the AGM. There are no imminent dramatic changes pending concerning deliveries to Arctic Paper or other customers. Nor have there been any changes to products. It is currently business as usual."
"We are now concentrating on developing Rottneros in the best possible way with the preconditions that we have. Several projects are running in parallel and we hope that we will soon be able to revert with more concrete information. We anticipate that the Swedish currency will continue to be strong, so now everyone needs to adjust to a low-inflation economy and continued endeavours to cut costs. Pulp prices are rising and demand is stable and no net capacity will be added to our markets in the near future," Terland concluded.
Rottneros has an annual production capacity of almost 400,000 tonnes of pulp at two mills in Sweden.
Rottneros Mill produces two grades of mechanical pulp, groundwood and CTMP pulp. The mill has a production capacity of approximately 170,000 tonnes, which makes the mill one of the world's largest producers of mechanical market pulp.
Vallvik Mill produces two grades of long-fibre sulphate pulp: fully bleached sulphate pulp, ECF (Elemental Chlorine Free) and unbleached sulphate pulp, UKP (Unbleached Kraft Pulp). The mill has an annual manufacturing capacity of approximately 240,000 tonnes.
SOURCE: Rottneros (www.rottneros.com)