* Income after net financial items amounted to SEK 80 (52) million for
the third quarter of 2015 and SEK 222 (80) for January–September, our
best January–September performance in the current structure.
* Net turnover for the third quarter totalled SEK 455 (404) million, a
13% increase compared with 2014.
* The quarter is strong in terms of both production and financial
performance, despite the negative impact of a seven-day production
shutdown at Rottneros Bruk.
* Production volumes increased by 7% compared with the third quarter of
2014, and for January-December, production volumes increased by 9%
compared with the same period last year.
* The PIX price in USD declined during the second quarter and amounted
to an average of USD 846. Denominated in SEK, the price decrease was
less than 1% compared with the second quarter. Compared with the third
quarter of 2014, the price increase in SEK was about 11%.
* Cash flow before investments in the third quarter of 2015 remained
strong at SEK 84 (92) million and SEK 270 million on a rolling
12-month basis, compared with SEK 104 million for full-year 2014.
Interest-bearing net receivables as of 30 September amounted to SEK
221 (44) million.
* The board has decided to convene an extraordinary general meeting in
December 2015 regarding the so-called additional dividend of SEK 0.40
per share, corresponding to MSEK 61.
Comments by the president
Established greatly improved new level of earnings
With a strong third quarter, the Rottneros Group continued on its
positive course. It is now one year since I became CEO and it feels
appropriate to reflect on the past year. Rottneros’ employees have made
the company considerably more stable, establishing a greatly improved
performance level. The dollar and pulp prices are part of the trend, but
our internal improvement programme has made a substantial contribution.
The company has become debt-free and has resumed paying dividends.
It is also uplifting to note that the board has decided to convene an
extraordinary general meeting in December to decide on a so-called extra
dividend of SEK 0.40 per share.
Profit after net financial items was SEK 80 million for the quarter, a
54% improvement over the same period last year and profit after net
financial items for the first nine months was SEK 257 million, a 152%
improvement over the first nine months of 2014. This positive trend was
driven by our own improvement measures, although the trend for the
dollar compared with last year continued to benefit earnings. Production
increased by a total of 7 per cent compared with the same quarter last
year. Earnings also improved compared with the second quarter, even
though pulp prices and the dollar both moved in the wrong direction.
This achievement clearly shows that the Group\'s steady improvement
initiatives have produced results.
The decline in electricity prices has benefitted earnings since
production of high-yield pulp at Rottneros Mill is so
electricity-intensive. Since we hedge a large portion of our electricity
purchases, our purchase prices will continue to drop even moving forward
as older futures contracts are renewed at lower electricity prices.
Continued stable demand
Demand for our various grades of pulp generally remained stable.
However, price pressures in the global market for long-fibre pulp
continued this quarter.
With the launch of Opacity Extreme, a high-yield pulp for thin packaging
and printing paper, as well as special applications, Rottneros further
strengthened its product portfolio. This is the third new product the
company has launched over the past year. With its combination of
excellent strength properties, high purity and superior opacity, Opacity
Extreme could become the leading product in the market for thin paper.
The annual maintenance shutdown of Vallvik Mill is scheduled for
November. In connection with the shutdown, a few capacity-enhancing
installations will be carried out within the framework of Agenda 500.
Competitive return and efficient investments
When we compare Rottneros’ performance with reports published by our
industry colleagues, we can conclude that our return on capital employed
over the past 12 months was 26 per cent, which is the best in the
industry. This means that Rottneros’ has met its financial target:
return on capital employed shall exceed this figure for comparable
pulp-producing companies.
Rottneros has formulated Agenda 500, a new long-term industrial plan
aimed at increasing production at the company’s two mills to at least
460,000 tonnes per year through extremely cost-effective investments.
Under this scheme we are investing less than half as much money as our
competitors per tonne of increased capacity. During the quarter the
Board of Directors of the Rottneros Group resolved to invest an
additional SEK 100 million in equipment within the framework of Agenda
500. These investments will be installed in the autumn of 2016.
Compared with our industry colleagues, we also see that our employees
are as productive as our competitors’ employees, even though the
competitors often have larger plants. Because Rottneros’ two mills have
been so well-run over the years, I can also note that our level of
equity in fixed assets is about half as large as other pulp producers,
measured in relation to turnover, or volume produced.
Competence and resource reinforcement
Rottneros’ dedicated employees are the cornerstone of our efforts to
grow the Group. And it is extremely positive that during the year we had
almost 50 new hires. As a result, we replaced employees who are leaving
due to retirement, but we also increased staffing as part of the
initiative to enhance skills and resources as planned under Agenda 500.
The Group\'s strong position in relation to the industry also means that
we can confidently continue our journey towards an even stronger
Rottneros.
Per Lundeen
(For the complete interim report see attached file)
For more information, please visit. www.rottneros.com
Vallvik, 13 November 2015
Per Lundeen
Chief Executive Officer and President
Rottneros discloses the information provided herein pursuant to the
Securities Markets Act and/or the Financial Instruments Trading Act.
This information was submitted for publication on 13 November 2015 at
08.30 am. A Swedish and an English version of this report have been
drawn up. The Swedish version shall prevail in the event of differences
between the two reports.
