Rottneros New CEO Says Strong Swedish Kronor Hurt First Half 2013 Earnings
July 18, 2013 - Rottneros' new President and CEO said that despite better pricing and increased shipments of market pulp, the strong Swedish kronor continues to hurt the forest products industry in Sweden.
Carl-Johan Jonsson, who succeeded Ole Terland on July 1 as President and CEO of Rottneros, commented on the Swedish market pulp producer's interim first half 2013 results:
"Global economic development continues to be rather weak. The same applies to the global pulp market. Deliveries to China and Europe increase in some months but reduce in others. All in all global pulp deliveries increased by almost two percent during the first five months of the year compared with the first five months of the previous year.
"It is primarily our dependency on currencies and the strong Swedish kronor that is exasperating the forestry industry and its profitability." — Carl-Johan Jonsson, President and CEO of Rottneros.
"The PIX price for NBSK pulp in Europe continued to rise during the spring, and the average price for the second quarter was just over USD 850 per tonne compared with just over USD 820 tonnes for the first quarter of the year. The PIX price for the stronger USA market has reached USD 950 per tonne. It is primarily our dependency on currencies and the strong Swedish kronor that is exasperating the forestry industry and its profitability.
"Global pulp stocks are hovering around 'normal levels,' which serves to increase confidence levels ahead of July and August, which are slightly weaker months in terms of deliveries and may mean that the stronger delivery period for both China and Europe could gain momentum from stock levels with a balanced base.
"A number of long fibre-based pulp mills were converted for dissolving pulp production in 2013 and one large Nordic mill as well as a couple of Russian plants closed down, which looks favourable in terms of the balance between supply and demand. There will be an increase in the short fibre capacity in South America in 2013 and 2014, which could affect stability in the market.
"I took office as CEO and President of Rottneros on 1 July and would like to conclude my first CEO’s statement by thanking my predecessor Ole Terland for his achievements at Rottneros and for enabling a seamless handover," Jonsson concluded
- Loss after net financial items amounted to SEK -20 (36) million for the second quarter of 2013. Loss after net financial items amounted to SEK -24 (32) million for the first half of 2013. The deviation is in all essential respects attributable to prices and currency rates. This result has been affected by costs relating to the outgoing CEO in accordance with the applicable contract.
- Cash flow from operating activities amounted to SEK -9 (67) million for the second quarter of 2013. This negative cash flow is fully explained by a drop in performance.
- The USD price for chemical pulp rose by USD 50 per tonne during the period January to June and by USD 23 per tonne during the second quarter. However, the average price was SEK 302 per tonne less than the previous year owing to the weak dollar rate.
Rottneros has an annual production capacity of almost 400,000 tonnes of pulp at two mills in Sweden. For more information, visit: www.rottneros.com.