INTERIM REPORT JANUARY – JUNE 2015
Comments by the president
The second quarter remained strong for the Rottneros Group. Profit after net financial items was SEK 75 million, an improvement of SEK 44 million compared with the same quarter in 2014. As in the first quarter, the improvement was mainly driven by both currencies and the pulp market moving in the right direction in relation to the corresponding quarter in 2014. Increased sales and production were also important factors. Both plants delivered good profitability and substantial improvements in earnings.
The higher volumes can be explained by the higher availability in production, especially at Rottneros Mill. This clearly shows the results of our determined efforts towards higher production volumes that we have conducted over the past year. Compared with the corresponding quarter last year, production increased by 9 per cent for the Group. At Rottneros Mill, volume increased an impressive 16 per cent, driven by a sharp upswing in groundwood pulp.
In general, customer demand for our grades of pulp remains stable. However, we have experienced continued pressure on prices during the quarter, mainly driven by an increased supply on the market. Translated into SEK, prices continue to be high, thanks to the weakening of the SEK against the USD.
Absorption Express, the high yield pulp for absorbing fluids, which we launched last fall, continues to exceed our expectations with respect to demand. During the quarter, we carried out yet another successful product launch, Bulk Booster, Rottneros’ newly developed high-yield pulp for cardboard. It increases the bulk or thickness more than other available raw materials, increased bending stiffness is a quality that is crucial for many carton applications.
During the first half of the year Rottneros’ Board of Directors decided on the first investments, for a total of SEK 180 million, to kick off our long-term industrial plan, Agenda 500. The plan is to increase the capacity of the Group through successive investments to eliminate the bottlenecks in the two mills. Investments are planned in renewed production equipment as well as in a stronger organisation. The long-term goal is to expand Rottneros’ total capacity to reach a business volume of at least 460.000 tonnes of pulp per year, compared with the 345,000 tonnes produced last year. The total plan is about SEK 800 million for Agenda 500 in full, divided into about SEK 400 million in the medium term and SEK 400 million in the longer term. Compared with investment levels for increased capacity per tonne found in the international paper industry, Rottneros’ investments are highly competitive. The pace of the investments will be determined by Rottneros’ ability to allocate the increased volumes in the market.
We continue to have a good starting position for the future. The strong dollar more than compensates for the negative price trend. Our highly motivated employees are working intensively to expand our business towards higher volumes and thus more efficient production. I look forward to the coming year and the strategic steps that we will take.
Per Lundeen
(For the complete interim report see attached file)
For more information, please visit. www.rottneros.com
Vallvik, 28 August 2015
Per Lundeen
Chief Executive Officer and President
Rottneros discloses the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. This information was submitted for publication on 28 August 2015 at 08.30 am. A Swedish and an English version of this report have been drawn up. The Swedish version shall prevail in the event of differences between the two reports.