Crown Van Gelder reported 1H 2012 net profit of Euro 1.8 million

Aug 03, 2012. /Lesprom Network/. Crown Van Gelder's (CVG) net profit for the first six months of 2012 amounted to Euro 1.8 million vs. a loss of Euro 1.2 million in the first six months of 2011. The clear improvement in results is in line with earlier communicated expectations. The return to profitable operations in the first half of 2012 was supported by improved market conditions, strong order intake, a better product mix and lower pulp costs, as the company said in the press release received by Lesprom Network. In the first half of 2012, revenue amounted to Euro 83 million, unchanged compared to the first half of 2011. Sales and production volumes increased by 4% to around 107,000 ton. Miklas Dronkers, CEO, commented: “Our focus on new products in combination with recovery in market demand and a decrease in pulp prices enabled us to report a strong improvement in results and profitability in the first half of 2012. Volume in new products grew more than 40% compared to the second half of 2011. Top achiever in the NBD program is our Crown Digital range, showing good growth figures. CVG offers the broadest product range for high-speed inkjet printers in the market, including a promising product for full-colour printing on demand of books and magazines. We are pleased with the 4% increase in production volume as a result of a focus on efficiency in the production process. In the second half of 2012 our focus will remain unchanged on new products, markets and the further improvement of production efficiency, the foundation of our Vision 2016 which we will present in February 2013.” Pulp is the most important raw material for CVG s papers and also the largest input cost in the papermaking process. Compared to the first half of 2011, the average pulp price in Euro for CVG in the first half of 2012 was around 15% lower. After pulp prices increased to record levels in the first half of 2011, with the NBSK benchmark reaching USD 1,020 per ton in June 2011, the pulp market gradually returned to a more balanced supply and demand situation. The NBSK pulp price came down to around $830 per ton, early 2012. Energy costs for the first half of 2012 remained practically stable as energy prices were fixed at the same level as in 2011. Employee benefit costs decreased by Euro 0.5 million due to a lower staff level and lower pension costs. Other operating costs increased by Euro 0.7 million due to higher maintenance and consulting expenses. In the first half of 2012 capital expenditure amounted to Euro 1 million. For the full year 2012, capital expenditure is expected to be around Euro 8 million, as announced at the publication of the full year results, which includes the periodic overhaul of the power plant and additional investments in the paper machines to exploit opportunities in new products and new markets. Capital expenditure and working capital requirements can be financed through operating cash flow and available credit lines. Sales and production levels in the second half are forecasted to be in line with the first half of 2012, bringing 2012 full year volumes to around 215,000 ton. As long as there is no clear solution to the European monetary and budgetary problems, uncertainties regarding the economic outlook and the stability of the European financial and monetary system remain. During the last two years, these uncertainties from time to time had a major impact on general market confidence, and made it also difficult to predict market conditions for the next period. It is therefore expected that the volatility on CVG s relevant markets will remain high. Crown Van Gelder N.V. develops, produces and sells high-quality speciality products in the woodfree uncoated and single-coated paper sectors.