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2019-02-07, 08:00
 - Regulatory


  • Net turnover for the fourth quarter of 2018 rose by 17% to SEK 580m (496). For the whole of 2018, net turnover rose by 18% to SEK 2,260m (1,912). As of 2018, revenues from by-products and the result from pulp price hedging are also included in net turnover. See p. 15 for details.
  • EBIT for the fourth quarter of 2018 increased to SEK 12m (-7). Earnings during the fourth quarter were affected by the annual maintenance shutdown at Vallvik Mill, as was also the case in the previous year. The loss of production and the direct cost of the shutdown decreased earnings for the fourth quarter by approx. SEK 67m (55). For the full year, EBIT amounted to SEK 295m (156), which is a record result in the Group’s current structure.
  • Profit after financial items for the fourth quarter increased to SEK 7m (-12) and for the full year to SEK 276m (147). Earnings per share for the fourth quarter rose to SEK 0.06
    (-0.06) and for the full year to SEK 1.45 (0.75).
  • NBSK list price during the fourth quarter of 2018 was 39% higher in SEK compared with the fourth quarter of 2017. For the full year, the list price in SEK was 35% higher compared to 2017.
  • Rising pulp wood costs had a negative effect of some SEK 50m and pulp price hedges a negative effect of SEK 40m on the fourth quarter results, compared with the fourth quarter of 2017. For the full year 2018, pulp wood costs were some SEK 160m higher than for 2017, while pulp price hedging had a negative impact of SEK 122m and electricity price hedging a positive impact of SEK 47m.
  • Focus on increased profitability. Fixed costs for 2018 were SEK 23m lower compared to 2017, equal to a decrease of 4%.
  • Production volume for the fourth quarter was stable at 93.6 (94.4) thousand tonnes, despite a somewhat longer maintenance shutdown in Vallvik Mill than earlier.
  • Dividend policy and long-term goals for Rottneros have been decided by the Board in connection with the strategy work. According to the revised dividend policy, Rottneros shall pay out 30–50% of net income, in accordance with the current covenants. 
  • After a strong year, the Board proposes to increase the ordinary dividend to SEK 0.40 per share (0.30) and to pay an extra dividend of SEK 0.30 per share (0.07), corresponding to 48 % of net income for 2018.


Rottneros summarises a strong 2018. The Group continues to deliver good profitability at the same time as the upgrade of our two pulp mills was completed within the investment program Agenda 500. Operating profit (EBIT) for the full year has almost doubled compared to 2017 and amounts to SEK 295m (156). 

Clear performance improvement
Strong demand for the Group's products, a high general market price and a favourable USD exchange rate are the main reasons for the year's results. The pulp price peaked at USD 1,230 / ton and started to fall slightly towards the end of the period.

For the full year 2018, sales increased by 18 per cent and amounted to SEK 2,260m (1,912). EBIT improved strongly despite increased raw material costs.

Earnings per share show an increase of 93 per cent from last year, which is the basis for the Board's proposal to increase the dividend by SEK 0.33 to SEK 0.70 per share.

Also the fourth quarter developed positively, and sales rose by 17 per cent compared with the same quarter in 2017. This increase, as for the full year, was largely driven by high pulp prices and favourable exchange rates. The raw material situation normalised, and we ended the year with slightly higher inventories than usual to be able to manage possible future disturbances.

However, the fourth quarter is always weaker in terms of earnings due to the annual maintenance shutdown at Vallvik Mill.

The investments in our facilities have led to an increased maximum production capacity and the focus is now on achieving even higher capacity utilisation.

The forest industry has historically been characterised by strong cyclical variations in demand and prices are set on a global level. We are now at the end of a long cyclical upturn where the slowdown is significant, and prices are beginning to fall. However, there are underlying structural trends of sustainability and increased use of renewable materials that support the demand for our products in the future. Nor have any new capacity increases been announced in the pulp industry in the coming years.

Investments over the past four years have totalled close to SEK 900m and the majority relates to upgrades of our mills in Vallvik and Rottneros. The year's total production of
393,600 tonnes is slightly below previous year's volume. Rottneros Mill set a new annual record, whereas Vallvik Mill was affected by some unplanned interruptions at the beginning of the year. In addition, the annual maintenance shutdown was longer than usual, according to plan.

One goal we set for 2018 was increased profitability through significant improvements in our way of working and those processes that we can influence. Looking back, I note that, despite a turbulent year with many challenges due to not at least unfavourable weather, we have succeeded very well with the task. By taking small steps every day towards a more efficient Rottneros, I see that in 2018 we built a significantly stronger company.

In order to support our core business, we started to work on developing and improving critical internal functions in the Group. Safety, competence enhancement and cooperation with schools to educate future employees are examples of areas where we have focused. We changed our sales organisation in the autumn of 2018 and now use our own sales organisation in Germany; our largest market after the Nordic region. Cooperation with agents and trading houses remains important for sales in the rest of Europe and the world.

Going forward
The core business continues its structured and systematic work with continuous improvements in all aspects. Rottneros Packaging has moved into new premises and we see a clear market potential for trays based on renewable raw material. The Lignol project continues and is an important example of how the forest industry can contribute to the fossil-free society.

The results for 2018 are in many ways proof of good teamwork. I feel privileged to lead Rottneros with all competent colleagues who handle change and challenges in a constructive and professional manner. I want to thank all my colleagues who have contributed during the year. I also want to thank our shareholders, customers, suppliers and lenders.

Lennart Eberleh, President and CEO

(For full report, please see attached file)

This information is information that Rottneros AB is obliged to publish under the EU Market Abuse Regulation and the Securities Market Act. The information was submitted via the contact person below for publication on 7 February 2019 at 8 a.m. CET. This report has been drawn up in both a Swedish and an English version. The Swedish version shall prevail in the event of differences between the two reports.

For further information, please contact:
Lennart Eberleh, President and CEO, Rottneros AB, +46 270 622 65

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