Rottneros Reports Improved 2014 Results on Favorable Currency, Pulp Market Conditions
Swedish market pulp producer Rottneros has reported financial results for the fourth quarter and full year 2014. Highlights inlcude:
Profit after net financial items amounted to SEK 13 million for the fourth quarter of 2014, compared with a profit of SEK 53 million for the third quarter of 2014 and a loss of SEK -44 million for the fourth quarter of 2013. Income after net financial items amounted to SEK 114 (-158) million for the full year 2014. The comparison period 2013 included one-off items amounting to SEK -92 million.
The PIX price remained stable during the fourth quarter and on average amounted to USD 932. The price increase in Swedish kronor amounts to seven per cent compared with the third quarter of 2014 due to the positive development of USD. The price increase in SEK amounts to approximately 19 per cent compared with the fourth quarter of 2013.
Cash flow from operating activities amounted to SEK 6 (2) million for the fourth quarter of 2014 and to 104 (62) for the full year. Net loan receivables amounted to SEK 59 (-25) million on 31 December.
BCTMP equipment from Utansjö Bruk was sold during the fourth quarter, which had a positive liquidity effect of SEK 39 million.
Per Lundeen took office as CEO on 6 November 2014 and appointed by the board until the 2016 AGM.
The Board proposes an ordinary dividend of SEK 0.20 per share together with a one-off supplementary dividend of SEK 0.20 per share in respect of the boost to liquidity resulting from the sale of the Utansjö plant.
Rottneros CEO, Per Lundeen‘s statement:
“2014 was a strong year for the Rottneros Group. Income before tax amounted to SEK 114 million, representing an improvement of SEK 180 million after adjustment for the large one-off costs that affected our income for 2013. This earnings trend was primarily a consequence of both currencies and the pulp market shifting in our favour. At the same time Focus 15 (our internal improvement programme) delivered according to plan and generated a significant boost to our result for 2014; we will see further effects in 2015 when we will be able to appreciate the full impact of our improvement programme for the full year.
“The successful trimming work for the Group demonstrates the long-term development potential at Rottneros. A number of planned measures to increase capacity were carried out during the maintenance shutdown at our mills in the autumn. This resulted in a production record for an individual day being achieved in December, both at Vallvik and Rottneros.
“I took over as Acting CEO of Rottneros in November 2014 having been on its Board of Directors since 2013. I believe in continuity, but also in developing our company so that it increases in size and efficiency. The Rottneros Group has a number of strengths on which it can build. Our paper pulp is often the market leader for certain applications, and a significant proportion of it includes grades with a high degree of specialisation.
Upon taking office I initiated the work to produce a long-term industrial development plan and a strategic action plan (Agenda 500). This programme will strengthen and develop Rottneros in the long-term. Looking forward, we need to continue to focus on our niche strategy, including products providing high value content for our customers. An investment-efficient expansion will now be implemented over the coming years to eliminate bottlenecks at our mills.
“The underlying analysis to invest and increase capacity is based on my conviction that there are major opportunities for Rottneros to compete through its niche strategy and independent status. The long-term trends in the various paper markets work both for and against pulp mills. Our future expansion is primarily oriented towards final products, such as packaging, electrical insulation uses, filters and tissue products. These are generally growing in pace with or above GDP, predominantly driven by developing markets such as China and India.
“We expect to launch new products during the coming year. This involves highlighting the competitive advantages of our various paper pulps. This applies primarily to Rottneros Bruk, which manufactures various grades of mechanical pulp. Adjustments to production can be made relatively quickly without any costly loss of production, which means that the mill offers major opportunities to manufacture limited volumes of niche-oriented grades.
“Another priority for the future is to strengthen our market organisation. As a first step we are adding resources to enhance our technical competence support in our dialogue with both current and potential customers. A highly topical example of this more active market work is our successful launch of Absorption Express groundwood pulp, and then a special pulp for tissue during the autumn.
“The Rottneros Group is founded on a long history and at the core of Swedish primary industry. Our committed workers are keen to push forward and develop our operation. It is also their commitment that has enabled the implementation of Focus15, and I would consequently like to extend my warmest thanks to all of our employees for the efforts they made over the year.
“Owing to structural transactions and earnings trends in recent years, Rottneros has become a company with great financial strength without any external loans. It is with great satisfaction that I can advise that the Board of Directors for Rottneros AB proposes that the Annual General Meeting resumes the dividend for our shareholders.
“Looking forward, I can observe that we have a strong base line for 2015. Market conditions are favourable, the dollar is strong and production is becoming increasingly efficient. I am therefore cautiously optimistic about the forthcoming year and the strategically important steps in development that await us.”