Production continues to grow, profit under pressure
THE
EBIT (operating profit) for the third quarter of 2020 was 4 (54) MSEK. A weak market due to the pandemic affected the result strongly.
PROFIT AFTER FINANCIAL ITEMS for the third quarter of 2020 was -1 (49) MSEK. Earnings per share for the quarter were -0,01
PRODUCED VOLUME amounted to 110,2 (100,3) thousand tonnes, which is a new record for a single quarter. The sales volume decreased slightly to 106,9 (110,8) thousand tonnes.
A STRONG BALANCE SHEET in uncertain times. The equity/assets ratio is 56 (61) % and available liquidity amounts to 542 (576) MSEK.
THE CORONA PANDEMIC has not had any negative effect on production, but the pulp market is characterized by great uncertainty and reduced demand. Measures have been taken to minimize the risk of infection spreading in the Group's facilities.
Comments from the CEO
Our focus on continuous improvements are generating result. At the same time, the effects of the corona pandemic weigh on both the market and our profitability. A new production record for a single quarter was reached during Q3 through strong volume growth. Our committed employees, solid balance sheet and efficient mills mean that we have good resilience against a continued tough market. Our strategic focus, to take
The consequences of the corona pandemic continued to affect our operations during the third quarter. Our extensive counter measures meant that the infection was kept away from our operations, but naturally it affects both the work environment and the opportunity to meet existing and new customers.
Despite the challenges, we follow our long-term plan to in- crease production through continuous improvements in our processes and routines. During Q3, production increased by 10 percent compared with Q3 last year. This meant a new re-cord level for a single quarter, just over 110 thousand tonnes. The comparison was affected by the fact that the maintenance stop at
Net turnover decreased by 18 percent during the quarter com-pared with the same period last year. At the same time, EBIT shrunk by 50 MSEK to 4 MSEK. The decline is explained by lower sales prices due to the weaker pulp market. As supply was greater than demand, we continued to sell a larger share than normal on short-term contracts, affecting margins negatively.
LIST PRICE MOVES SIDEWAYS DESPITE PANDEMIC
The pulp market continues to be squeezed by the pandemic's effects on the world economy. However, the list price of NBSK has been relatively stable at around
The long-term trend of declining pulp demand for graphic app-lications, in parallel with the growth of hygiene applications and packaging, means that the market is likely to trend structurally towards a more stable demand. In the US, the share of market pulp that is used for printing and writing paper currently makes up only 10 percent of the total market. Historically, the corre-sponding figure has been around a third of the market. Rott-neros benefits from the growth in the hygiene and packaging areas as we have strong market positions in these segments.
The supply of pulp wood remains at a healthy level. The supply balance between local wood and imports was at a favorable level during the quarter. A lower production rate in the pulp and paper industry, at the same time as the bark beetle problem boosts supply of timber, is positive for the market balance and means that prices decline.
Our large electricity purchases in
LAUNCH OF CLIMATE-SMART FOOD TRAYS
In October, our moulded fiber trays for ready meals were launched in supermarkets in
AGILE IN A FAST-CHANGING WORLD
Due to our size, we can be quick-footed and agile in the market. By quickly moving volumes between customers and different end use segments, we have found outlets for our continuously higher production volumes, despite the tough market situation. At the same time, we have a strong focus on keeping costs under control at all levels.
Our strong balance sheet with significant liquidity makes us well prepared for the uncertainty that prevails in the economy. The equity/assets ratio at the end of the third quarter was 56 per cent. At the same time, the Group's cash and cash equivalents amounted to 360 MSEK and unutilized credits to 182 MSEK. The interest-bearing net debt was 50 MSEK.
I want to thank all colleagues for their commitment to take the Group to the next level and stand up to the great challenges we meet. Through our counter measures, we try to keep the pandemic as far away from the business as possible. We focus on completing our systematic work to take
Finally, I would like to thank our customers and suppliers for jointly handling the pandemic in the best possible way and minimizing the consequences.
(For full report, please see attached release)
This information is such information that
The interim report for the third quarter will be presented on
All participants can follow the presentation via the web link: https://www.finwire.tv/webcast/rottneros/q3/
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.
For more information, please contact:Lennart Eberleh, President and CEO,
lennart.eberleh@rottneros.com
Box 144, 826 23 Söderhamn
+46 (0)270 622 00
rottneros.com
info@rottneros.com
https://news.cision.com/rottneros-ab/r/rottneros-interim-report-january-september-2020,c3220546
https://mb.cision.com/Main/15260/3220546/1322317.pdf
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