PROFIT UNDER PRESSURE FROM WEAKER USD
THE
LIST PRICE of NBSK pulp was 4% higher in USD and 7 % lower in SEK compared with fourth quarter 2019. The USD weakened against the SEK by 10% during the same period.
- PRODUCED VOLYM totalled 95,3 (100,4) thousand tonnes, impacted by the timing of the annual maintenance shutdown at
Vallvik Mill , which was carried out in its entirety during the fourth quarter. The Group set a new production record for the year: 412,6 (406.0) thousand tonnes.
- NET TURNOVER decreased by 10% to 490 (547) MSEK. Lower price in SEK was offset by higher sales volumes.
- THE BALANCE SHEET remains strong. The equity/assets ratio is 58 (58)% and available liquidity amounts to 512 (558) MSEK.
- EBIT (operating profit) for the fourth quarter of 2020 was -95 (-30) MSEK. The weaker USD, low market prices and the planned annual maintenance shutdown at
Vallvik Mill were the main reasons for the negative outcome. EBIT for full-year 2020 was -42 (268) MSEK.
- NET INCOME for the fourth quarter of 2020 was -77 (-29) MSEK. Earnings per share for the quarter were -0,50
(-0,19) SEK .
- DIVIDEND The Board of Directors proposes that no dividend be paid for 2020, in accordance with the terms for the bond loan.
- THE CORONA PANDEMIC has not had a negative impact on production, but the pulp market has been characterised by great uncertainty throughout most of the year with reduced demand for NBSK.
COMMENTS FROM THE CEO
The end of the year was weak in terms of earnings, mainly because Q4 was impacted by a weaker USD and the maintenance shutdown at
Net turnover in Q4 decreased by ten percent during the quarter compared with the Q4 last year. At the same time, EBIT worsened by 66 MSEK to -96 MSEK. The decline can be explained by lower sales prices denominated in SEK because of the weaker USD. The average SEK/USD exchange rate for Q4 was ten percent lower than in Q4 2019. We continued to sell a larger share than usual on short-term contracts in order to obtain sales for our volumes, which had a negative impact on margins.
As the annual maintenance shutdown at
For full-year 2020 the increase was thereby barely two percent, which is just over one percentage point lower than our long-term target of an annual increase of three percent. Considering the challenges we faced through the far-reaching consequences of the pandemic, we are satisfied with the outcome. In 2021 we will work systematically to increase availability at the mills in order to create the conditions that will enable us to exceed the long-term production target.
The pandemic continued to challenge our operations during the quarter. As a result of our extensive measures, we essentially avoided the infection to enter into our facilities despite the increasing community wide spread. Locally, a few employees tested positive for Covid-19 in recent times.
LIST PRICE CLEARLY CONTINUES TO RISE
A clear recovery is currently underway in the market, driven by accelerating growth in
The supply of pulp wood remains at a healthy level and clearly affects our purchasing costs. A good supply of locally sourced timber enables us to keep the proportion of imports down. A lower production rate in the paper industry, at the same time that the bark beetle problem boosts supply of timber, benefits the market balance, causing prices to fall. The balance in the pulp wood market will likely remain favourable over the coming year.
Our large electricity purchases at
DECISION ON ENVIRONMENTAL INVESTMENTS
In early 2021 the Board approved a number of investments to reduce emissions to water from
CLIMATE-SMART FOOD TRAYS LAUNCHED
In October we launched our fibre trays for ready-made meals in
CONTINUED STRONG BALANCE SHEET
With our strong balance sheet, and a substantial liquidity, we continue to be well-prepared for negative changes in our world. The equity/assets ratio is very good and was
58 percent at year-end, unchanged from the beginning of the year. Consolidated cash and cash equivalents, as well as unutilised credits, also remained at reassuring levels,
330 MSEK and 182 MSEK, respectively. Interest-bearing net debt was 81 MSEK.Finally, I would like to thank all of my coworkers for their extensive efforts to take the Group to the next level and to address the great challenges that we encountered over the past year. I would also like to extend a warm thank you to both our customers and suppliers. Together, we have optimally accomplished what has been possible to address the pandemic and thereby keep the business running smoothly.
(For full report, please see attached release)
This information is such information that
__________________________________________________________________________________________________________________________________________
The interim report for the fourth quarter will be presented on
Anyone can ask questions via the link in advance or during the presentation.
You can also watch the presentation afterwards via
and website: https://www.rottneros.com/investors/presentations/
The presentation will be held in Swedish. Questions can be asked in English.
Lennart Eberleh, President and CEO
+46 (0)270 622 65
lennart.eberleh@rottneros.com
https://news.cision.com/rottneros-ab/r/rottneros-year-end-report-january-december-2020,c3278883
https://mb.cision.com/Main/15260/3278883/1367634.pdf
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