STOCKHOLM, Sweden, Aug. 13, 2002 (PRIMEZONE) -- Holmen:
Quarter January-June
MSEK 2-02 1-02 2002 2001
Net turnover 4,027 3,938 7,965 8,213
Operating profit 616 743 1,359 1,366
Profit after financial 572 705 1,277 1,309
items
Profit after tax 514 499 1,013 917
Earnings per share 6.43 6.24 12.67 11.47
(before dilution), SEK
Return on equity, % 14.8 14.4 14.6 13.5
- The Group's profit after financial items for January-June was MSEK
1,277 (January-June 2001: 1,309). Holmen Paper's operating profit
declined by MSEK 258, while Iggesund Paperboard's operating profit
increased by MSEK 181.
The profit for the second quarter amounted to MSEK 572 (January-March: 705). The first quarter result includes MSEK 110 from the divestment of a replaced paper machine.
- The profit after tax was MSEK 1,013 (917), which corresponds to
earnings per share of SEK 12.67 (11.47). The return on equity was
14.6 per cent (13.5).
- The market for newsprint and magazine paper remained weak. Holmen
Paper's deliveries were higher than in the first quarter, but
production remained restricted. Prices were unchanged.
The market for paperboard remained weak. Iggesund Paperboard's deliveries and prices remained unchanged from the first quarter. Production was restricted, but to a lesser extent than previously.
BUSINESS AREAS
Holmen Paper Quarter January-June Full
year
2-02 1-02 2002 2001 2001
Net turnover, MSEK 2,029 1,894 3,923 4,214 8,757
Operating profit, MSEK 364 470 834 1,092 2,410
Operating margin, % 18 25 21 26 28
Return on operating 15 20 17 25 26
capital, %
Production, 1,000 376 362 738 788 1,586
tonnes
Deliveries, 1,000 383 345 728 743 1,525
tonnes
The market for newsprint and magazine paper remained weak. Deliveries of newsprint to Western Europe from west European producers were 8 per cent lower during the first half of the year than for the corresponding period in 2001. The capacity utilisation of west European producers ben efited from increased exports from Western Europe and reduced imports from Canada. Deliveries of magazine paper were slightly more stable, with a decline of some two per cent for both SC and LWC grades. The LWC market continues to be characterised by considerable over-capacity.
Holmen Paper's deliveries during the January-June period were 2 per cent lower than during the corresponding period in 2001. During the second quarter deliveries increased by 11 per cent in relation to the first quarter's low level. The prices of uncoated products were stable during the quarter. Capacity utilisation was restricted due to the order situation and the commissioning of a new paper machine.
The operating profit for January-June was MSEK 834 (1,092). The result was adversely affected by lower volumes and lower prices, which was partly offset by positive currency effects. The result includes a profit of MSEK 110 from the divestment of the old machine in connection with the installation of a new paper machine at the Hallsta Paper Mill.
The operating profit for the second quarter was MSEK 364 (Q1, 2002: 470). Excluding the profit generated by the sale of the paper machine at Hallsta, the result improved by MSEK 4. Deliveries increased, while the commissioning and trimming of the new paper machine increased costs.
Holmen Paper produces newsprint and magazine paper at three mills in Sweden and one in Spain.
Iggesund Paperboard Quarter January-June Full
year
2-02 1-02 2002 2001 2001
Net turnover, MSEK 1,209 1,205 2,414 2,155 4,467
Operating profit, MSEK 190 186 376 195 455
Operating margin, % 16 15 16 9 10
Return on operating 18 17 18 8 9
capital, %
Production, 115 106 221 198 403
paperboard, 1,000
tonnes
Deliveries, 110 110 220 201 410
paperboard, 1,000
tonnes
The market for solid bleached board and folding boxboard remained weak in Western Europe during the second quarter. Deliveries from west European producers, however, increased in January-June by 3 per cent on the same period in 2001 as a result of increased exports outside Western Europe.
Iggesund Paperboard's deliveries for January-June increased by 9 per cent compared with the same period in 2001. Deliveries and prices remained unchanged from the first quarter. Production was restricted, but to a lesser extent than previously. Iggesund Paperboard has announced price increases for solid bleached board and folding boxboard for the autumn of 2002.
The operating profit for January-June amounted to MSEK 376 (195). The improvement in the result is due primarily to higher delivery volumes and favourable currency effects as well as to lower costs than during the corresponding period in 2001, during which there was a production stop for rebuilding.
The operating profit for the second quarter amounted to MSEK 190 (Q1, 2002: 186). Higher maintenance costs were offset by lower costs for wood and energy.
Iggesund Paperboard produces solid bleached board and folding boxboard at two mills in Sweden and one in England.
Iggesund Timber Quarter January-June Full
year
2-02 1-02 2002 2001 2001
Net turnover, MSEK 148 157 305 376 712
Operating loss, MSEK 2 6 8 36 79
Production, 1,000 m3 55 56 111 165 299
Deliveries own 54 63 117 177 322
sawmills, 1,000 m3
The market for sawn timber remained weak. The operating result for January-June was a loss of MSEK 8 (loss 36). The improvement is mainly due to lower costs. In comparison with the first quarter, the result improved by MSEK 4 to a loss of MSEK 2 owing to lower costs.
Iggesund Timber produces sawn timber at one sawmill in Sweden.
Holmen Skog Quarter January-June Full
year
2-02 1-02 2002 2001 2001
Net turnover, MSEK 929 948 1,877 2,177 3,982
of which external 561 564 1,125 1,258 2,306
customers
Operating profit, MSEK 105 128 233 179 455
Wood consumption
at Group's Swedish 946 945 1,891 2,121 4,144
mills, 1,000 m3
Harvesting in company 639 530 1,169 894 2,394
forests, 1,000 m3
The operating profit for January-June was MSEK 233 (179). The level of harvesting in company forests was higher while prices were lower. In comparison with the first quarter, the result deteriorated by MSEK 23 to MSEK 105, mainly due to seasonally higher costs, which were partly offset by a higher level of harvesting in company forests.
Holmen Skog's profit is mainly generated by the sale of wood harvested from company forests.
Holmen Kraft Quarter January-June Full
year
2-02 1-02 2002 2001 2001
Net turnover, MSEK 247 295 542 559 1,108
of which external 85 123 208 224 439
customers
Operating profit/loss, 2 18 16 41 49
MSEK
Electric power
consumption 971 882 1,853 1,988 3,998
at Group's Swedish
mills, GWh
Group production of 333 459 792 782 1,578
electric power, GWh
The operating profit for January-June was MSEK 16 (41). The decrease in the result is mainly due to lower prices. In comparison with the first quarter, the result declined by MSEK 20 to a loss of MSEK 2, largely due to a seasonal decrease in power generation.
Holmen Kraft's result is primarily generated by the production of electricity at wholly and partly owned hydroelectric power stations.
FINANCING
The cash flow before capital expenditure was MSEK 1,728 for the first six months of 2002. Capital expenditure amounted to MSEK 1,065. A dividend of MSEK 800 was paid.
The Group's net financial debt amounted to MSEK 3,284 at June 30 (December 31, 2001: 3,161). The debt/equity ratio was 0.23 (0.22). The equity ratio was 56.5 per cent (56.4).
Holmen's sales consist to a large extent of exports from Sweden. Currency exposure has been hedged for the remainder of 2002, approximately 75 per cent for 2003 and approximately 25 per cent for 2004.
A five-year committed credit facility of MEUR 500 was taken up during the second quarter, which replaces the previous committed credit facility.
CAPITAL EXPENDITURE
The Group's fixed capital expenditure was MSEK 1,065 (728), of which MSEK 705 relates to the new paper machine at the Hallsta Paper Mill. Depreciation according to plan amounted to MSEK 566 (562).
EMPLOYEES
The average number of employees in the Group was 5,097 (full year 2001: 5,238).
TAX
The County Administrative Court has decided that Holmen is entitled to make a deduction for tax purposes of a deficit shown in its 1995 tax return. The decision has come into legal effect. The effect on the result of MSEK 102 is included in the tax stated for the second quarter.
IMPORTANT EVENT
Holmen has decided to exercise an option to buy back hydroelectric power assets with an annual production capacity of 541 GWh, which were sold in 1983 under a "partner-financing" arrangement. The transaction will be carried out at the turn of the year 2002/2003 and the price is just over SEK 1.7 billion.
Stockholm 13 August 2002
Goran Lundin President and CEO
The interim report has not been subject to general examination by the company's auditors. The interim report for January-September will be released on 29 October.
For further information please contact: Goran Lundin, President and CEO, tel +46 8 666 21 00 Anders Almgren, CFO, tel +46 8 666 21 16 Christer Lewell, Public Relations Director, tel +46 8 666 21 15.
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