Holmen's 2012 profits plummet year-on-year


Holmen's results for 2012 were down significantly compared to the 2011 figures. The Paper and Timber divisions were the two loss-making businesses.

Holmen's net profit more than halved to SEK1,853m in 2012 compared to SEK3,955m in 2011. The operating profit even plummeted by 73% to SEK1,520m while sales experienced only a slight decrease of 4 % year-on-year and amounted to SEK17,852m in 2012.

The company said that results were negatively impacted by an impairment loss and restructuring costs of SEK193m in its Paper division. Furthermore, it pointed out that net profit in 2011 had included SEK2,648m from the revaluation of forest.

Holmen's Paper division struggled with a difficult demand situation, especially for printing paper in 2012. As a result, deliveries were down in all segments with newsprint suffering the strongest decline of 10% compared to the previous year. In contrast, rationalisations, a better product mix and lower recovered paper prices were said to have had a positive effect on results. Nevertheless, in 2012, the division booked an operating loss of SEK99m compared to a profit of SEK228m in the year before while sales were down by 6% to SEK8,144m.

Still in its Paper segment, Holmen has announced measures at its Hallsta mill. The company said it would invest SEK200m in energy efficiency improvements at the site. This is said to be part of the plan announced in October 2012 to create a modern mill with only two machines that occupy strong positions in machine-finished magazine paper and book paper. The third machine with a capacity of 140,000 tpy of SC paper will be closed down in the second half of this year. The energy investment is expected to be completed by summer 2014.

The Timber division also posted red figures in 2012 and booked an operating loss of SEK130m, up from a loss of SEK136m in the year before. Sales have increased by 29% to SEK1.129m thanks to higher deliveries. Selling prices, in contrast, are said to have fallen as did prices for timber and pulpwood, produced by Holmen Skog. This division's operating profit was significantly lower than the year before, also due to the above mentioned revaluation of forest in 2011, and stood at SEK931m, only around one fourth of the previous year's figures. Turnover went down by 5% year-on-year and reached SEK6,061m.

The energy business profited from higher production, but also pointed to lower market prices. Sales and operating profit in 2012 declined by 4% and 13%, amounting to SEK SEK1,728m and SEK355m respectively.

The Paperboard business suffered a 31% decrease in results which the company mainly attributed to lower contribution from currency hedges. However, deliveries were almost unchanged year-on-year. With a turnover of SEK4,967m, the division recorded an operating profit of SEK596m in 2012.

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