In the 1st quarter of 2015 the Arctic Paper Group generated good financial results compared to those from a year before. EBITDA was PLN 68.8m (growth of 42.2% compared to 1Q 2014), operating profit was over PLN 37.6m (up 94.6% in comparison to 1Q 2014), and net profit was PLN 12.8m (growth by 44.2%, as compared to 1Q 2014). Sales revenues in 1Q 2015 reached PLN 836.2m, as compared to PLN 804.5m in 1Q 2014 (up 3.9% in comparison to 1Q 2014). The operations of Rottneros, which achieved excellent results, had a positive impact on the financial results of the Group in the 1st quarter of 2015.
Norske Skog is a world leading producer of publication paper with strong market positions in Europe and Australasia. Publication paper includes newsprint and magazine paper. Norske Skog’s Albury mill, with a production capacity of 265 000 tonnes of newsprint, ceased production on 5 December 2019. After the closure of the Albury mill Norske Skog operates a total of six mills in five countries, with an annual production capacity of 2.3 million tonnes. Newsprint and magazine paper is sold through sales offices and agents to over 80 countries. The group has approximately 2 300 employees.
In addition to the traditional publication paper business, new growth initiatives related to renewable energy, biochemical products and fibre products have been launched.
The parent company, Norske Skog ASA, is incorporated in Norway and has its head office at Skøyen in Oslo. The company is listed on Oslo Stock Exchange with the ticker NSKOG.
○ EBITDA for the period NOK 560 million, compared to NOK 505 million in the previous quarter * Includes net gain of NOK 236 million primarily from sale of water rights and termination of energy contracts related to Albury transactions
○ Cash flow from operations NOK -78 million, a decrease from NOK 150 million in the previous quarter * Negatively impacted by settlement of redundancy payment for Albury in fourth quarter and gain from termination of energy contract paid in first quarter 2020
○ Continued challenging operating environment in Australasia * Impairment of NOK 155 million recognized for Tasman mill
○ Optimisation of asset portfolio in Australasia continues
○ The Board of Directors proposes dividend of NOK 6.25 per share * To be approved by the Annual General Meeting to be held 16 April 2020
Operating revenue were in line with previous quarter with stable sales volumes and lower prices into the fourth quarter in Europe. Asian prices remained weak in the fourth quarter. Other operating income for the fourth quarter includes gain on sale of additional water rights as well as settlement for the termination of the energy contract at Albury in total NOK 255 million.
Cost of materials increased due to higher sales volumes but remained stable per tonne. Underlying there was a reduction in variable cost for pulpwood, recovered paper and energy. Fixed costs increased due to higher employee benefit expenses and maintenance costs as well as costs in connection with listing.
EBITDA increased quarter-over-quarter, mainly due sale of water rights and termination of energy contract.
Restructuring expenses recognised in the quarter mainly relates to the redundancies and transactions cost following the closure of Albury.
Depreciation of NOK 112 million is below previous quarter reflecting the closure of Albury.
Impairment recognised in the quarter relates to the Albury mill and the Tasman mill. Despite regional improvements following the closure of Albury the operating environment is expected to be challenging.
Derivatives and other fair value adjustments reflects a decrease in mark-to-market valuation of embedded derivatives related to energy contracts in New Zealand.
Embedded derivatives related to energy contracts in Norway that are sensitive to change in paper and pulpwood prices changed little in the quarter.
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