* Profit after financial items amounted to SEK 56 million (75) for the
second quarter 2016 and SEK 125 million (177) for January-June.
* Net turnover for the second quarter was SEK 413 million (456).
* The list price for NBSK pulp over the second quarter was 7% lower in
USD and 9% lower in SEK, compared to the second quarter 2015. In SEK,
the price decrease was 2% compared with the first quarter 2016.
* Production volumes in the second quarter rose by 4% compared with the
second quarter 2015 and by 5% compared with the first quarter 2016.
Production during the quarter totalled 100,000 tonnes.
* The Company’s investments in the Agenda 500 development programme
continue to increase efficiency and the rate of production.
* In the second quarter shareholders were paid dividends totalling SEK
76 million.
* Lennart Eberleh will take over as new President and CEO of Rottneros
AB on 1 September 2016.
Comments by the President
A new milestone for the Group
Production volumes continuing to rise
The Rottneros Group reports a good second quarter, in which the decline
in operating profit compared to the same period last year may be traced
to external factors, such as lower pulp prices and a slightly weaker
USD. Return on capital employed, measured over a rolling 12-month
period, was a strong 19.8 per cent. In a sector-wide comparison, our
return on capital remains at the top end.
Our Agenda 500 development programme continues to bear fruit, in the
form of steadily rising production levels and productivity. The
aggregated production volume for our two mills grew by 4 per cent during
the quarter, rising to 100,000 tonnes, a record for an individual
quarter and a milestone for the Group. The high production levels are
the result of goal-focused work and the investments being carried out
within the framework of Agenda 500, aiming at a production volume of at
least 460,000 tons per year in the long term.
A resolution that a dividend of SEK 0.50 per share be paid was approved
by the AGM in May. The Group’s strong cash flows and balance sheet mean
that our capacity for paying dividends is strong also going forward.
Market moving in the right direction
Compared with the levels in early 2015, pulp prices have declined, a
factor that has clearly impacted on the trend of earnings. During the
quarter, the average price of NSBK was 9 per cent lower in SEK than in
the same period last year. However, prices in USD have been rising for
some months. The average price in the second quarter was slightly higher
than in the first, and this trend has remained early in the third
quarter.
A weaker dollar is also weighing on the Group’s earnings compared to
last year. During the second quarter, the average USD exchange rate was
2 per cent lower than in the same period in the preceding year. Since
the Brexit vote in late June, the exchange rate has strengthened and, in
addition to the rising pulp price, it is clear that the dollar exchange
rate is also moving in the right direction at the start of the third
quarter.
Thanks to the high production volume during the quarter, we have been
able to build up inventories when preparing for the maintenance
shutdowns in the autumn, in order to optimise deliveries to our
customers during the autumn.
Focus on Agenda 500
During the quarter, we continued our intensive effort to develop our
mills within the framework of Agenda 500. The major share of investments
conducted in 2016 will become operational during the annual maintenance
shutdowns in the autumn. These investments will expand capacity at both
mills, above all in the run-up to 2017. We have also acquired a new
biomass boiler for Rottneros. The procurement process was completed in
June and the new boiler, which is to be commissioned at mid-year 2017,
will deliver major energy and environmental gains.
As an important step in developing Rottneros to meet the future, we
conducted several training activities during the quarter in order to
further upgrade our skills and expertise. Providing skilled employees
with the opportunity to develop within the Group is important in
enabling us to consolidate Rottneros’ world-leading position in
specialist pulp.
New President and CEO
On 1 September, I will hand over as President and CEO to Lennart
Eberleh, an experienced and competent industry colleague. I am looking
forward to playing a part, as a Board member, in driving Rottneros
forward. I would like to take this opportunity to thank all you
employees, customers, suppliers, owners, Board of Directors and other
stakeholders for the support and help I have received during my time as
interim CEO in continuing to build, with you, a successful Rottneros.
Per Lundeen
Chief Executive Officer and President
(For the complete interim report see attached file)
For more information, please visit. www.rottneros.com
This information is information that Rottneros AB is obliged to make
public pursuant to the EU Market Abuse Regulation and the Securities
Markets Act. The information was submitted for publication, through the
agency of the contact person set out below, at 8.00 a.m. on 29 August
2016. 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.
For more information, please contact:
Krister Lindgren, acting CFO of Rottneros AB, +46 72 715 06 50
