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2016-08-29, 08:00
 - Regulatory

Comments by the President  

A new milestone for the Group


Production volumes continuing to rise

The Rottneros Group reports a good second quarter, in which the decline in operating profit compared to the same period last year may be traced to external factors, such as lower pulp prices and a slightly weaker USD. Return on capital employed, measured over a rolling 12-month period, was a strong 19.8 per cent. In a sector-wide comparison, our return on capital remains at the top end.

Our Agenda 500 development programme continues to bear fruit, in the form of steadily rising production levels and productivity. The aggregated production volume for our two mills grew by 4 per cent during the quarter, rising to 100,000 tonnes, a record for an individual quarter and a milestone for the Group. The high production levels are the result of goal-focused work and the investments being carried out within the framework of Agenda 500, aiming at a production volume of at least 460,000 tons per year in the long term.

A resolution that a dividend of SEK 0.50 per share be paid was approved by the AGM in May. The Group’s strong cash flows and balance sheet mean that our capacity for paying dividends is strong also going forward.


Market moving in the right direction

Compared with the levels in early 2015, pulp prices have declined, a factor that has clearly impacted on the trend of earnings. During the quarter, the average price of NSBK was 9 per cent lower in SEK than in the same period last year. However, prices in USD have been rising for some months. The average price in the second quarter was slightly higher than in the first, and this trend has remained early in the third quarter.

A weaker dollar is also weighing on the Group’s earnings compared to last year. During the second quarter, the average USD exchange rate was 2 per cent lower than in the same period in the preceding year. Since the Brexit vote in late June, the exchange rate has strengthened and, in addition to the rising pulp price, it is clear that the dollar exchange rate is also moving in the right direction at the start of the third quarter.

Thanks to the high production volume during the quarter, we have been able to build up inventories when preparing for the maintenance shutdowns in the autumn, in order to optimise deliveries to our customers during the autumn.


Focus on Agenda 500

During the quarter, we continued our intensive effort to develop our mills within the framework of Agenda 500. The major share of investments conducted in 2016 will become operational during the annual maintenance shutdowns in the autumn. These investments will expand capacity at both mills, above all in the run-up to 2017. We have also acquired a new biomass boiler for Rottneros. The procurement process was completed in June and the new boiler, which is to be commissioned at mid-year 2017, will deliver major energy and environmental gains.

As an important step in developing Rottneros to meet the future, we conducted several training activities during the quarter in order to further upgrade our skills and expertise. Providing skilled employees with the opportunity to develop within the Group is important in enabling us to consolidate Rottneros’ world-leading position in specialist pulp.


New President and CEO

On 1 September, I will hand over as President and CEO to Lennart Eberleh, an experienced and competent industry colleague. I am looking forward to playing a part, as a Board member, in driving Rottneros forward. I would like to take this opportunity to thank all you employees, customers, suppliers, owners, Board of Directors and other stakeholders for the support and help I have received during my time as interim CEO in continuing to build, with you, a successful Rottneros.


Per Lundeen

Chief Executive Officer and President


(For the complete interim report see attached file)


For more information, please visit.


This information is information that Rottneros AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out below, at 8.00 a.m. on 29 August 2016. 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.


For more information, please contact:

Krister Lindgren, acting CFO of Rottneros AB, +46 72 715 06 50


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