• Loss after net financial items amounted to SEK -4 million for the first
quarter of 2012, compared with a loss of SEK -44 million for the fourth
quarter of 2011 and a profit of SEK 19 million for the first quarter of
2011.
• The USD price for chemical pulp is increasing and price increases of USD
20-30 per tonne have been announced for April (to USD 870 per tonne).
However, the average price in Swedish kronor during the first quarter of
2012 was less than it was in the fourth quarter of 2011.
• Global stock levels for pulp are falling and deliveries of pulp to Asia are
strong. There has simultaneously been a reduction in the cost of timber and
electricity, which has a positive impact on margins.
• Cash flow from operating activities amounted to SEK -32 (-25) million for
the first quarter of 2012. This negative cash flow is largely explained by
investments implemented at the end of 2011 being paid for at the start of
2012.
CEO’s statement
The beginning of 2012 was significantly more stable than the end of 2011 from
the perspective of a pulp supplier. Strong deliveries to China, which started
before and continued after the turn of the year, have altered the momentum of
the global pulp market. The price falls have been transformed into an upturn.
Demand has primarily been for short-fibre chemical pulp, as the price fell too
low and there was a very significant price difference in relation to long-fibre
pulp; more than USD 200 per tonne compared with the normal historical
difference of USD 50-100 per tonne. The PIX Europe price index for short-fibre
pulp rose by over USD 100 per tonne in 2012, while the index for long-fibre
pulp rose by just over USD 10 per tonne, which means that the price difference
is now normal. The Swedish krona strengthened in relation to the US dollar
during the first quarter of the year, so that the PIX index in Swedish kronor
is now lower than it was at the turn of the year. However, there is momentum in
the market. All of the major market pulp suppliers announced price increases
for both March and yet again for April so that the list price in Europe now
amounts to USD 870 per tonne for long-fibre chemical pulp. These price
increases will gradually have an impact during the spring; this combined with
falling pulpwood prices will mean that our margins will improve once again. Our
operational surplus for the quarter was SEK 10 million and our operating loss
after depreciations was SEK -3 million.
It finally looks as though CTMP prices will follow chemical pulp prices
upwards. Three price increases have already been made this year in Asia, albeit
from a low level. In the course of the significant price rise for chemical pulp
following the global financial crisis in 2008/09, CTMP prices became entrenched
at a low level, with an ensuing negative impact for both the Canadian and
Nordic forestry industry, which persisted until 2012. We are now seeing a high
demand for primarily long-fibre CTMP for the packaging sector in Asia, where
this pulp’s unique combination of properties makes it possible to manufacture
packaging that is both rigid and light. Better demand including improved sales
prices combined with low timber and electrical energy prices mean that the low
margins will now improve.
Despite the improving position for both of our two main products, a shadow is
being cast over an old and proud Rottneros product, namely groundwood pulp. We
are the last remaining supplier of bleached fine groundwood pulp and have
therefore been able to retain a good price level. However, non-integrated
groundwood pulp customers in the tough and vulnerable printing paper sector are
losing both volume and market shares and are increasingly being forced to
discontinue this paper production. We are still hoping for renewed
opportunities in Japan where groundwood pulp is traditionally used for thin
printing paper. We are also attempting to offer the board market an extremely
high bulk pulp to keep the cost of board to a minimum without impairing the
stiffness of the product.
Ole Terland
President and CEO
(For full report, see attached file)
Rottneros, a company that was originally established in the 1600s, is an
independent and flexible supplier of customised paper pulp of high quality.
Rottneros has been able to adapt in order to meet high customer expectations by
continually developing its products and maintaining high levels of delivery
reliability, technical support and service.
Rottneros has an annual production capacity of almost 400,000 tonnes of pulp at
two mills in Sweden. Increasingly intensive product development in line with
the requirements of customers will result in profitability that is higher and
more stable throughout the business cycle.
Rottneros AB (publ)
Box 70 370, SE-107 24 Stockholm, Sweden
Visiting address: World Trade Centre, Kungsbron 1, C6, Stockholm, Sweden
Telephone +46 8-590 010 00, Fax +46 8-590 010 01
info@rottneros.com www.rottneros.com
