Rottneros slips further in the red in Q1-Q3 2013
Rottneros is in the red after the first nine months of the year. Impairment losses and currency effects, among other things, negatively impacted results, the company said.
Rottneros has posted negative results in the first nine months of the year. The pulp producer reported a net loss of SEK115m in spite of higher delivery figures. From January to September 2012, the company's loss was just SEK3m. The operating results also declined considerably year-on-year, falling from a profit of SEK5m in the first nine months of 2012 to a loss of SEK111m in the same period of this year.
Rottneros attributed the losses in large part to an impairment loss taken on the CTMP plant at its mothballed Utansjö mill. The book value of the plant had been examined during the third quarter following longstanding attempts to sell it, but a sale no longer seemed likely, the company said. As a result, the company recognised a SEK80m impairment loss on the plant.
The strength of the Swedish krona in comparison to the US dollar also had a negative impact on results. For example, it meant that the company could not benefit from price increases. Rottneros reported that the average price for NBSK rose year-on-year by $24 in the period between January and September 2013. However, converted into local currency, prices were 2% below the level seen in the first nine months of 2012.
This impacted the company's sales revenues. Although production and shipment figures increased, Rottneros posted revenues of SEK1.07bn in the first nine months of the year, down by 3.2% compared to the same period of 2012. The output of the company - which operates two pulp mills with a total capacity of 400,000 tpy - rose from 244,200 t in the first three quarters of 2012 to 254,500 t in the same period of this year. This was primarily due to an increase of 5,200 t in groundwood pulp production in the Rottneros mill, where market-related downtime had been carried out during the reporting period last year. Rottneros' delivery volumes were 1.5% higher year-on-year at 255,900 t.
According to Rottneros, other factors that negatively influenced the company's results include one-off costs related to the departure of the former CEO, who was replaced in July, and higher energy costs.
For the remainder of the year, Rottneros has a "favourable outlook" for the softwood pulp market. Company CEO Carl-Johan Jonsson said demand was expected to rise due to the start-up of new tissue machines. At the same time, supplies would likely be reduced as a result of planned maintenance shutdowns at many pulp producers.
Jonsson added that the company was planning to improve internal processes and capacity utilisation in the future. Following the decision not to cease groundwood pulp production at the Rottneros mill, the line would now return to full production during the autumn, the CEO said.
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