STOCKHOLM, Sweden, Aug. 28, 2003 (PRIMEZONE) -- Sveaskog (Other OTC:ASDOF) conducts forestry and timber sales based on its holdings of approximately 3.5 million ha of productive forest land. The forestry operations also include property management as well as commercial activities relating to hunting, fishing and recreation. The forestry operations are conducted under the Sveaskog name. The Group also includes a sawmill business and cartonboard manufacture. The industrial operations are conducted under the names AssiDoman Timber (until 30 June 2003) and AssiDoman Cartonboard.
Quarter January - June
MSEK 2003 Q 2 2003 Q 1 2002 Q 2 2003 2002
Net sales 2,469 2,234 2,293 4,703 4,251
Operating profit 515 412 389 927 717
Profit after
net financial items 375 275 275 650 506
Operating profit for the second quarter amounted to MSEK 515, an increase of MSEK 103 or 25% compared with the previous quarter and of MSEK 126 or 32%, compared with the second quarter of 2002.
Compared with the previous quarter, earnings from Forestry operations improved for seasonal reasons and due to higher deliveries from own forests. Earnings for the sawmill operations (Timber) decreased slightly. The cartonboard business (Cartonboard) also had lower earnings due to a loss of production in the pulp mill. Gains from property sales increased.
Compared with the first half of 2002, earnings for Forestry operations and Timber improved while Cartonboard's earnings were unchanged. The increases were mainly volume related, partly through acquisitions. Gains from property sales also increased.
Sveaskog's sawmill operations and Mellanskog Industri merged as of 1 July 2003 under the name Royal Star Wood Products AB.
Changes in the Group
Following a parliamentary decision, the shares in the wholly state-owned company Svenska Skogsplantor AB were transferred to Sveaskog at 1 April 2003. The intention is to carry out a reconstruction of the company. This transfer had a negative effect on Sveaskog's shareholders' equity of MSEK -73, but entailed no charge against Sveaskog's earnings. Starting in the second quarter of 2003, Svenska Skogsplantor is included in Sveaskog's consolidated accounts.
A final agreement on a merger between AssiDoman Timber Holding AB and Mellanskog Industri AB was signed on 4 July subject to approval by the Swedish Competition Authority. Such approval was received on 27 August. The merger took place as of 1 July 2003 and will be formally effected through a non-cash issue on 29 August, whereby Timber's shares will be transferred to Mellanskog Industri in exchange for shares in the latter company which at the same time will change its name to Royal Star Wood Products AB. The company will be 50% owned by Sveaskog, 25% by LRF via Lantbrukarnas Ekomomi AB, approximately 21% by Mellanskog ekon. forening, and approximately 4% by some 4,500 small shareholders.
Sveaskog's consolidated accounts at 30 June 2003 were unaffected by the planned merger. With effect from 1 July, Sveaskog's holding in Royal Star will be reported according to the equity method.
Sveaskog AB (publ.) (556558-0031)This interim report has not been audited.
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