(For complete interim report see attached file)
* Profit after net financial items for the whole of 2015 was SEK 259
(114) million, our best annual result in the current structure.
* Profit after net financial items for the fourth quarter of 2015 was
SEK 1 (13) million, a weak result mainly relating to problems in
connection with the production start-up after the maintenance shutdown
in Vallvik Mill.
* Cash flow before investments for the whole of 2015 was strong and
totalled SEK 335 (104) million. Rottneros is debt-free and at year-end
cash and cash equivalents totalled SEK 169 (89) million.
* In the second quarter shareholders were paid dividends of SEK 61
million and in the fourth quarter an additional dividend of SEK 61
million, for a total of SEK 122 million in 2015.
* Net turnover for both the fourth quarter and full-year 2015 increased
16 percent compared with the previous year.
* Production volumes in the fourth quarter increased by 7 percent and
for the full year, production volumes increased by 8 percent compared
with the same period the previous year. Both Rottneros Mill and
Vallvik Mill set new records for annual production.
* The Board of Directors proposes a dividend of SEK 0.30 per share.
Comments by the president
Historic year in terms of performance
2015 was an extremely favourable year for the Rottneros Group. The year
as a whole represented a significant improvement in earnings, with
operating profit more than doubling to SEK 263 million. We can thus
report a return on capital employed of 25 percent. This means that we
have met our target: return on capital employed shall exceed this figure
for comparable pulp-producing companies. As a result of our strong
financial position, in early November the Board of Directors also
decided to propose an extra dividend of SEK 0.40 per share. The
resolution was approved in December by an Extraordinary General Meeting.
However, the last quarter of the year was weak. Profit after net
financial items was SEK 1 million, to be compared with SEK 13 million
for the same period in 2014. The fourth quarter is normally seasonally
weak because of Vallvik Mill’s annual maintenance shutdown. This year
the start-up period was more difficult than planned following a number
of capacity-enhancing investments that were made within the framework of
the Group’s ongoing Agenda 500 investment plan. The lengthy start-up
process had a negative impact on delivery volumes in late November and
in December. This situation, combined with a lower price/mix as well as
higher maintenance and production costs comprise the basis for the
weaker earnings.
Stable demand, but price pressures
In general, demand for our grades of pulp remains stable. However, price
pressures in the global market for long-fibre pulp continued this
quarter, applying further pressure to the traditionally weaker fourth
quarter. For the whole of 2015, the price decline in the market was
pronounced. In early 2015 the published NBSK pulp price was USD
930/tonne and by the end of the year it dropped by 14 percent to about
USD 800/tonne. Consequently, 2016 is starting at a significantly lower
level in terms of price than the previous year.
Long-term and efficient investments
Within the framework of our long-term industrial plan, Agenda 500, which
aims to increase production from the level in 2014 of 344,000 tonnes to
a target of at least 460,000 tonnes, production in 2015 reached 373,300
tonnes, an increase of 8 percent from 2014. Both mills set new
production records. The investments are highly cost-effective, as
measured by SEK invested per tonne of additional capacity, compared with
other pulp producers. During the year the Rottneros Group’s Board of
Directors approved investments for SEK 205 million in Vallvik Mill and
SEK 136 million in Rottneros Mill, of which SEK 103 million was carried
out in 2015.
During the last quarter of 2015 the Board decided to expand the CTMP
line’s flash dryer at Rottneros Mill.
After the end of the quarter Vallvik Mill was granted a new
environmental permit allowing the mill to produce the requested volume
of 255,000 tonnes of sulphate pulp. Consequently we are allowed to
implement our planned expansion of capacity in line with Agenda 500.
Enhanced expertise and resources
Our personnel comprise the foundation of the strong improvement in
profitability at Rottneros. During the year we hired about 50 new
employees. As a result, we replaced employees who are leaving due to
retirement, but we also increased staffing to enhance skills and
capacity at Rottneros.
To sum up, 2015 has been a very strong year for the Rottneros Group. As
a result of the gradual weakening of the price of pulp during the year,
we are entering 2016 with less favourable conditions than the previous
year. Given the improvement measures carried out and planned in the
mills, we continue to view the future with optimism, provided that pulp
prices do not continue to fall. In recent weeks, some major industry
players have announced price increases for February.
Vallvik, 12 February 2016
Per Lundeen
Chief Executive Officer and President
(For the complete interim report see attached file)
For more information, please visit. www.rottneros.com
Rottneros discloses the information provided herein pursuant to the
Securities Markets Act and/or the Financial Instruments Trading Act.
This information was submitted for publication on 12 February 2016 at
08.30 am. 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 reports.
