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Rottneros interim report Januari-September 2023

2023-10-26, 08:00
 - Regulatory
Positive outcome reflects the strength in Rottneros’ business model
  • NET TURNOVER decreased by 14 percent to 693 (806) MSEK. Excluding groundwood pulp, turnover fell by 2 percent. Compared with the second quarter of 2023, turnover increased as a result of higher sales volumes of both sulphate pulp and CTMP. Reduced demand on Rottneros’ traditional markets has caused a rise in the proportion of spot sales.
  • THE LIST PRICE of NBSK pulp was 21 percent lower in USD and 19 percent lower in SEK compared with the third quarter of 2022. Compared with the second quarter of 2023, the list price fell by 10 percent in USD and by 8 percent in SEK.
  • PRODUCED VOLUME excluding groundwood pulp ­amounted to 88.8 (85.9) thousand tons, an increase of 3 percent. Rottneros Mill had its annual maintenance shutdown during the quarter.
  • SOLD VOLUME of sulphate pulp and CTMP totalled 102.3 (86.1) thousand tons.
  • EBIT (operating profit) was 49 (185) MSEK. The quarter continued to be affected by a weak European market. Variable costs showed a substantial increase over 2022, but have declined compared with the first half of 2023.
  • NET PROFIT was 33 (270) MSEK. Earnings per share for the quarter totalled 0.22 (1.77) SEK.
  • THE BALANCE SHEET remains strong. The equity/assets ratio was 66 (68) percent and available liquidity totalled 696 (713) MSEK. Net cash amounted to 264 MSEK.


Comments by the CEO - Our sustained efforts are paying off

In the third quarter, our performance was highly satisfactory despite challenging external circumstances, primarily driven by strong volume growth and sound cost management. As a result, we are holding our ground, despite cost inflation and the sluggish market trends of the past year. The pulp market is now displaying clear signals of stabilisation, albeit against a backdrop of significant uncertainty. Our commitment to ongoing efficiency improvements, addressing customer needs and developing long-term growth niches, combined with our strong financial position, provide us with the confidence to ensure the long-term development of Rottneros despite the turbulent global landscape.

Lower pulp prices in USD and higher variable costs continued to negatively impact our income statement. Comparable units saw a 2 percent reduction in net turnover compared with the same quarter in the previous year, totalling 693 MSEK. EBIT for the quarter was 49 MSEK, bringing the year-to-date EBIT to 239 MSEK and corresponding to a margin of 11.3 percent, even in the face of challenging external conditions. The outcome serves as a clear affirmation that our commitment to the development at Rottneros is paying off and, to some extent, offsetting the substantial cost inflation, especially for our primary input, wood. However, there has been a modest upturn ­in the last quarter driven by improved access to local pulp wood, which reduced dependence on imports, as well as lower chemical costs.

Production achieved favourable results during the quarter, with a growth of 3 percent, excluding groundwood pulp. CTMP showed a robust growth of 8 percent. Meanwhile, our deliveries increased by a noteworthy 19 percent for comparable units, mainly due to our successful efforts to sell volumes within our selected niches, while also demonstrating agility in acquiring new customers, despite the underperformance in our key market, Europe. Our niche strategy, featuring custom products designed to meet the needs of our customers, along with the highest level of service, is clearly proving its worth in a challenging market environment.

In our most vital customer segment, board and packaging, the European market has seen a decline of as much as 13 percent year-to-date compared with the previous year.


The pulp market is displaying signs of stabilisation, albeit against a backdrop of significant uncertainty. Our customers agree that the market is difficult to assess. China has taken the lead globally with a noticeable price surge since June, effectively closing the price gap with Europe. However, many ­analysts question the sustainability of the upturn, contending that it has been driven by speculation rather than increased customer demand.

In our primary market, Europe, inventories have decreased in recent months, and the list price has plateaued since early September, settling just below 1,145 USD. This translates to a decline of nearly 100 USD compared with the end of the prior quarter. Since the close of the quarter, we have seen several announcements of price hikes of 50 USD.


The organisation is dedicating significant energy to the development investments approved by the Board in the spring. They are proceeding according to plan, and some preliminary work was accomplished during the maintenance shutdown in September. They will be taken into operation in 2024. A crucial aspect includes the substantial expansion of CTMP capacity and the generation of renewable energy with associated energy storage at Rottneros Mill.

At Vallvik Mill, work is underway on the investment in a new tall oil plant. It plays a central role in the chemical recycling at the mill, where tall oil is a valuable by-product capable of replacing fossil oil in various applications. Work on the investment in Rottneros Packaging is in progress. However, the timetable is impacted by lengthy equipment delivery times.


In the face of cost inflation and the challenging pulp market conditions over the past year, we are taking all possible measures to offset the adverse margin effects. Consequently, we have restructured our organisation based on current conditions, which has been both distressing and raised concerns among our staff. Our current priority is to cultivate a work setting where people thrive.


Despite our cost-focused approach, safety remains a top priority. It is therefore especially rewarding to observe that our efforts are producing results by steadily reducing the number of incidents resulting in sick leave. By the close of the quarter, both mills were approaching an entire year with no accident-

related absences.


Our strong financial position enables us to work on long-term development at Rottneros and generate value on multiple levels. The equity/assets ratio at the close of the quarter was 66 percent. The available liquidity remained largely unchanged and amounted to a reassuring 696 MSEK.

Lastly, I would like to express my appreciation to all of my ­associates at Rottneros for their dedicated efforts in further advancing our business every day, and to our customers, suppliers, owners, and the Board for their ongoing cooperation.

Lennart Eberleh

President and CEO

(For full report, see attached pdf)

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 26 October 2023 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.


Reminder: Invitation to Rottneros’
presentation of interim report Q3 2023

All participants can follow the presentation via the web link at 12.00 CET, 26 October 2023:
Rottneros - Q3 presentation 2023 - Finwire

Questions can be asked via the link in advance or during the presentation.
You can also watch the presentation afterwards via
Rottneros Youtubekanal and
Rottneros Rapporter och presentationer

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

For further information please contact:

Lennart Eberleh, President and CEO, Rottneros AB,
+46 (0)270 622 65,

Monica Pasanen, CFO, Rottneros AB,
+46 (0)270 622 70,

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