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Rottneros year-end report January–December 2020

2021-02-04, 08:00
 - Regulatory

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.


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 Vallvik Mill. For 2020 as a whole we noted a new production record, 412 600 tonnes, corresponding to a growth of almost two percent. The pulp market has begun to strengthen, mainly driven by China, and prices are now clearly rising. Our focus on gradually higher production will, if possible, be even greater in 2021.

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 Vallvik Mill was somewhat later in 2020, which meant that its full impact fell during Q4, the comparison with 2019 is somewhat out of line since last year’s shutdown also had some effect on Q3. For this reason, along with somewhat lower than planned production at both mills, production declined by 5 percent for the quarter compared with Q4 2019.

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.


A clear recovery is currently underway in the market, driven by accelerating growth in China at the same time that Europe has stabilised. The list price of NBSK thereby rose during the fourth quarter by USD 40, to USD 880 as of 31 December, after having been relatively stable at USD 840 for over a year. The increase has continued at the beginning of 2021. Since our prices are affected with some lag in relation to list prices, first-quarter earnings will benefit to a larger extent than was the case for Q4. Rottneros is also benefitting from growth in the hygiene and packaging areas since we have a solid product offering for these customer segments. 

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 Rottneros Mill continue to be problematic with significant imbalances in the electricity market caused by the inadequate transmission capacity. The resulting electricity shortage in southern Sweden has been accompanied by extremely high prices during certain periods. This situation also has a negative impact on our electricity futures.

In early 2021 the Board approved a number of investments to reduce emissions to water from Vallvik Mill. The investments total 33 MSEK and are linked to the mill’s recently updated environmental permit. With this, Vallvik Mill has increased its production permit to 255 thousand tonnes.

In October we launched our fibre trays for ready-made meals in Sweden. The trays, which reduce the quantity of plastic by up to 85 percent compared with traditional fossil-fuel based packaging, are made from raw materials from certified forests.

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 Rottneros AB is required to disclose in accordance with the EU Market Abuse Regulation and the Securities Market Act. The information was submitted for publication on 4 February 2021 at 08.00 by the contact person below. This report has been prepared in both a Swedish and an English version. In the event of deviations between the two, the Swedish version shall prevail.


The interim report for the fourth quarter will be presented on 4 February 2021 at 13.00 CET. All participants can follow the presentation via the web link: 

Anyone can ask questions via the link in advance or during the presentation.
You can also watch the presentation afterwards via Rottneros'  Youtube channel
and website:

The presentation will be held in Swedish. Questions can be asked in English.


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