STOCKHOLM, Sweden, Jan. 29, 2002 (PRIMEZONE) - AssiDoman, year-end report 2001:
Quarter Full year
MSEK 2001 Q 4 2001 Q 3 2001 2000
Net turnover 1,720 1,643 11,284 24,643
Operating profit 319 319 3,030 3,473
Profit after net
financial items 381 354 3,122 3,090
Earnings per,
share SEK 5.87 2.68 33.32 23.81
- calculated on
average number
of shares 95,157,179 95,157,179 98,019,208* 18,373,034
* weighted average
-- The Corrugated & Containerboard business area was sold to the
Dutch company Kappa in May 2001.
-- Billerud AB, owned by AssiDoman and Stora Enso, was listed on the
stock market in November when AssiDoman distributed its shares in
Billerud.
-- In December 2001, Sveaskog AB, a company wholly owned by the
Swedish State, acquired approximately 95% of the shares in
AssiDoman AB. On January 28, 2002, AssiDoman AB was delisted from
the Stockholm Stock Exchange (Stockholmsborsen).
-- Profit after net financial items increased by MSEK 27 in the
fourth quarter compared with the previous quarter. For the full-
year 2001, profit after net financial items improved by MSEK 32
over the previous year.
-- Operating profit for remaining units, excluding property sales,
increased by MSEK 59 in the fourth quarter to MSEK 240 compared
with the previous quarter. This improvement was mainly
attributable to forestry operations and Cartonboard. For the full-
year 2001, operating profit rose MSEK 111 to MSEK 831 compared
with the previous year.
Market
Growth in the global economy weakened sharply in 2001. In AssiDoman's product areas, however, demand was mainly stable although with a somewhat weaker trend for sawn timber. Both roundwood and sawn timber were subject to price pressure due to excess supplies. The market for packaging board was favorable.
In the final quarter of the year, the timber market only noted small changes in demand and prices. The surplus of sawn timber was reduced through production cutbacks. The market situation for packaging board remained comparatively good with stable demand.
Future economic development is difficult to predict but most analysts take the view that the global recession has reached its lowest point and that the demand situation will improve towards the end of 2002.
Demand for roundwood is expected to remain unchanged at the beginning of 2002. A comparatively stable market is also expected for sawn timber while the cartonboard market is assessed as slightly more uncertain.
Sales, Results and Profitability
AssiDoman's group structure was changed substantially in 2001 through the sale and distribution of businesses.
The sold business area Corrugated & Containerboard is included in AssiDoman's consolidated accounts for the period January - April 2001. The distributed company Billerud AB is included as an associated company in AssiDoman's accounts for the period January - October 2001.
Units sold to Frantschach in 2000 are included in AssiDoman's consolidated accounts for the period January - July of that comparative year.
A more detailed account of structural changes in 2001 and the earnings impact from operations sold and distributed during the year is provided below under the heading "Changes in the Group".
Fourth Quarter
AssiDoman's net turnover for the quarter amounted to MSEK 1,720 compared with MSEK 1,643 in the previous quarter, an increase of 5%. Turnover increased for all business units. Turnover for the two quarters does not include any sold or distributed units.
Operating profit for remaining units amounted to MSEK 240, an increase of MSEK 59 or 33% compared with the previous quarter. The improvement for Forestry & Wood Supply was seasonal. Cartonboard increased its earnings mainly due to higher volumes. Timber's results were largely unchanged.
The total operating profit amounted to MSEK 319, matching the third- quarter figure. The improved earnings for remaining units was counteracted by, among other things, a lower share of profit being received from Billerud following the distribution of the company in November. Capital gains from property sales amounted to MSEK 4 (29).
Profit after net financial items totaled MSEK 381 (354), an increase compared with the previous quarter of MSEK 27 or 8%. Net financial items amounted to MSEK 62 compared with MSEK 35 in the third quarter. The change in net financial items was mainly due to positive currency effects.
Full Year
Net turnover for the full-year 2001 for remaining units amounted to MSEK 7,248 (7,182), an increase of 1% compared with the previous year. The increase was mainly attributable to Cartonboard. Total turnover amounted to MSEK 11,284 (24,643), a 54% decrease compared with the previous year. This decline was due to the changed group structure.
Operating profit for remaining units increased by MSEK 111 to MSEK 831. Both Cartonboard and Forestry & Wood Supply improved their earnings while Timber's earnings decreased. The operating margin amounted to 11% (10) during the year.
Total operating profit amounted to MSEK 3,030, compared with MSEK 3,473 for the full-year 2000. The total earnings impact from Corrugated & Containerboard amounted to MSEK 1,610 (1,018). The results for the previous year included MSEK 388 for units sold to Frantschach as well as MSEK 332 (2001: MSEK 18) in funds from Alecta. The capital gain from property sales amounted to MSEK 56 (261).
Profit after net financial items amounted to MSEK 3,122 compared with MSEK 3,090 in the previous year. Net financial items improved by MSEK 475 mainly through sale of operations.
Net tax for the year amounted to MSEK +145. This positive result was due to restructuring of the Group, including the sale of Corrugated & Containerboard, as well as restructuring of remaining units. In addition to these effects, net tax included a tax charge of approximately 28% for operating activities. In the previous year net tax amounted to MSEK - 266, corresponding to an average tax rate of 35% and a positive tax effect from the sale of operations.
Net profit amounted to MSEK 3,266 (2,818), which corresponds to SEK 33.32 (23.81) per share.
Return on capital employed amounted to 13% for the full year and return on equity was 14%. Interest cover was 14.3.
The number of employees decreased mainly due to the sale of operations. The average number of employees in remaining units amounted to 2,245 (2,342).
Cash Flow, Investments and Financial Position
Cash flow from operating activities amounted to MSEK 1,579 for the full year 2001. In the same period investments in fixed assets amounted to MSEK 625. Investments for remaining units amounted to MSEK 363, mostly within Cartonboard.
Interest-bearing net cash amounted to MSEK 4,632 on 31 December 2001, compared with a net debt of MSEK 2,177 at year-end 2000. Liquid assets increased mainly through the sale of Corrugated & Containerboard. The formation of Billerud also had a positive impact on liquid assets through the transfer of debts. A share redemption program led to a MSEK 4,411 decrease in liquid assets.
The Group's visible equity ratio at year-end was 73%, compared with 62% at the beginning of the year. The debt/equity ratio was -0.22 (0.09).
Business Areas
Forestry & Wood Supply
Fourth Quarter
The timber market was largely stable during the period with only small changes in demand and prices. For seasonal reasons, both total deliveries from the Group's forests and the proportion of timber rose compared with the third quarter.
The market for pulpwood was balanced during the period, compared with a surplus situation in the previous quarter. The timber market in north Sweden was characterized by a continued shortage of pine timber and a more balanced situation for spruce timber. In south Sweden there was still a shortage of spruce timber and a balance for pine timber. The price level was unchanged for both pulpwood and timber.
Operating profit amounted to MSEK 252 compared with MSEK 186 in the previous quarter. This improvement is mainly seasonal with higher timber volumes from the company's own forests and a higher proportion of timber. The third quarter was characterized by a large amount of forestry work and fellings with a high proportion of pulpwood.
Full Year
The timber market in north Sweden was balanced at the beginning of the year. Pine timber prices were decreased in April. Fiber flows were extensive in the autumn. At times there were timber shortages due to the warm, wet autumn. Prices remained stable.
In south Sweden there was a surplus of most grades at the beginning of the year. This turned into a shortage of spruce timber while the surplus of softwood pulpwood remained. By year-end, there was still a shortage of spruce timber while other grades were largely in balance. Price reductions have occurred throughout the entire area for all grades.
Operating profit for the full year amounted to MSEK 947 compared with MSEK 890 in the previous year. The improvement was mainly attributable to higher revenues from an increased value content in completed deliveries and lower harvesting costs.
Timber
Fourth Quarter
The European market for sawn timber remained unstable. The effects of the lower production in Finland in the autumn were insufficient to have any noticeable positive impact on prices. For AssiDoman, price levels were largely unchanged. Deliveries increased compared with the third quarter due to seasonal fluctuations.
The operating loss for the period was MSEK 1, compared with a profit of MSEK 1 in the previous quarter. The earnings impact from the higher volumes was counteracted by a less favorable delivery mix and higher costs.
Full Year
Consumption of sawn timber in the larger European markets fell in 2001. Sawmill customers encountered growing problems with profitability, intensifying competition and threats from substitute materials. There was also a high supply of sawn goods which created an imbalance between supply and demand resulting in price pressure in most markets. Supplies decreased in the second half, however, mainly due to lower production in Finland.
The currency trend favored the sawmill business in 2001 but was unable to compensate for the effects of lower market prices. At AssiDoman, this decline could be limited by focusing on strategically chosen markets and customers.
Operating profit amounted to MSEK 13 compared with MSEK 41 in the previous year. Higher deliveries were unable to compensate for lower prices.
Cartonboard
Fourth Quarter
The market situation for packaging board was comparatively favorable in the fourth quarter with higher deliveries and stable demand after the seasonal weakening in the third quarter. Some reduction in order bookings was noted, however, towards the end of the year.
Operating profit amounted to MSEK 51, compared with MSEK 18 in the third quarter. This improvement was mainly due to higher selling volumes and higher production. Earnings for the third quarter were charged with costs due to an extended maintenance shutdown.
Full year
The market for packaging board developed favorably during the year with some volume growth and higher prices for most grades. AssiDoman's delivery volumes rose while a greater focus was made towards specific markets and customer segments.
Operating profit for 2001 amounted to MSEK 165 compared with MSEK 100 in the previous year. This improvement was mainly due to higher prices, increased volumes and higher productivity.
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