<p>
(For table, see attached file)</p>
<ul>
<li>
Profit after net financial items amounted to
SEK 19 (11) million for the first quarter of 2011.Operating
profit amounted to SEK 21 (7) million for the period.</li>
</ul>
<ul>
<li>
The pulp market is strong and prices in USD for chemical pulp increased
during the end of the first quarter, although at the same time the Swedish
krona strengthened significantly in relation to the US dollar.Further price
increases were announced for the start of the second quarter.</li>
</ul>
<ul>
<li>
Cash flow from operating activities amounted to SEK -25 (69) million for
the first quarter 2011, corresponding to SEK -0.16 (0.46) per share. A
significant increase in working capital of a temporary nature had a negative
impact on cash flow at the end of the quarter.</li>
</ul>
<p>
<strong>CEO’s statement</strong></p>
<p>
The global pulp market experienced a strong start to the year when buyers from
China returned to the market in full force.Rottneros has obviously benefited
from this.We are reporting a profit before tax of SEK 19 million for the first
quarter, which is an improvement of SEK 6 million compared with the previous
quarter and an improvement of SEK 8 million compared with the first quarter of
last year.</p>
<p>
This winter has been particularly severe, which has had a negative impact on
the production outcome for all production lines, and energy consumption has
also increased considerably.Swedish energy prices have also rocketed this
winter and are now noticeably higher than prices in continental Europe.
Furthermore, there has been a sharp increase in the price of oil, which has
also had an impact on costs at our mills.The cold weather ended in March and
our production rate is once again at the level planned.We are very happy to
confirm that Vallvik Mill is coping with the higher level of production for
long periods, which resulted from the investments made during the autumn.All
that is left now is to obtain approval from the public authorities for this
increased level of production, which we are counting on following connection of
the investments made during the year primarily in biological water
purification.</p>
<p>
Rottneros and the entire chemical pulp market raised the list price from USD
950 to 980 per tonne in March, which gradually had an impact on the income
statement from April.A further USD 30 per tonne was reported for April and has
now also been reported for mechanical CTMP pulp.Price trends for CTMP, fuelled
by developments in the Chinese market, were particularly disappointing during
the autumn and winter.We have never previously seen price differences as large
as these in relation to chemical pulp. The explanation for this is not
immediately clear, which makes the future difficult to predict even though
things appear to be bright for long-fibre sulphate pulp.</p>
<p>
We are continuing our preliminary studies into the preconditions for
establishing new bioenergy operations at both of our pulp mills.Vehicle fuel
based on forest raw materials appears to be of particular interest for us and
our mills.We also submitted very extensive EU funding applications for
investments in renewable energy during the quarter.A decision on these matters
will not be made until 2012.The rigid adherence of Swedish politicians to
decisions concerning the taxation of various forms of energy and fuel has had a
significant impact on the decision to invest.</p>
<p>
Ole Terland</p>
<p>
President and CEO</p>
<p>
 </p>
<p>
 </p>
<p>
<strong>THE PULP MARKET </strong></p>
<p>
<strong>Markets and products</strong></p>
<p>
The pulp market is strong and prices in USD for chemical pulp had risen by 30
USD/tonne by the end of the first quarter.Further price increases of
USD 30 per tonne were forewarned for the start of the second
quarter.</p>
<p>
Statistics for bleached chemical market pulp for the total global market
showed that deliveries for the period January to February 2011 amounted to
6.48 (6.46) million tonnes, which was 0.3% higher than the same period in
2010. Eighty-nine per cent (91% for the same period in 2010) of the global
supply capacity for bleached chemical pulp was utilised for the period January
to February. An estimated 97% (94%) of production capacity was utilised during
the same period.</p>
<p>
Global producer stocks of bleached chemical pulp amounted to 3.95 million
tonnes at the end of February.Stock has consequently risen by 0.1
million tonnes compared with the beginning of the year.Stock levels were
0.9 million tonnes higher compared with the same time of the previous year.</p>
<p>
<strong>Long-fibre chemical pulp (NBSK) </strong> <strong>(produced at
Vallvik)</strong></p>
<p>
The price was USD 949 per tonne at the beginning of the year and USD 977 per
tonne at the end of March.The market for long-fibre chemical pulp is
good.Producer stock levels of long-fibre chemical pulp are lower than normal
levels, corresponding to 28 days’ production.</p>
<p>
Delivery capacity utilisation for the period January to February 2011 was 93%
(92% for the same period in 2010), and production capacity utilisation was
around 96%, which remains unchanged compared with the same period of the
previous year. </p>
<p>
<strong>Mechanical pulp and CTMP </strong> <strong>(produced at
Rottneros)</strong></p>
<p>
The price of short­-fibre CTMP was approximately USD 600-650 per
tonne in the Western European market at the beginning of the year.The price
subsequently rose by USD 20 to 30 per tonne.Demand for CTMP developed more
rapidly than for  chemical pulp at the beginning of 2011. Deliveries
during January and February rose by 12 per cent compared with the same period
of 2010.</p>
<p>
Delivery capacity utilisation for the period January to February 2011 was 96%
(86%) and production capacity utilisation was 104% (97%).</p>
<p>
 </p>
<p>
(For complete report, including tables, see attached file)</p>
