Norske Skog reports 2Q EBITDA of 393 million ($65.5 million)

Aug 02, 2012. /Lesprom Network/. Higher capital utilisation and lower costs strengthen Norske Skog's gross operating earnings in the 2Q compared with the same quarter last year, as the company said in the press release received by Lesprom Network. Gross operating earnings (EBITDA) in the 2Q were NOK 393 million ($65.5 million), up from NOK 248 million ($41.3 million) in the same period last year, mainly due to lower costs and better capacity utilisation. The result is on the same level as the 1Q 2012, despite the closure of production at Follum and the sale of Bio Bio in Chile. “Despite challenging markets, we have had better capacity utilisation, significant cost reductions and a significant reduction in debt so far this year,” says President and CEO in Norske Skog, Sven Ombudstvedt. Cash flow from operating activities (before financial items) was NOK 423 million ($70.5 million), a significant improvement from the same quarter last year, where cash flow was NOK 295 million ($49.2 million). Net interest-bearing debt decreased during the quarter from NOK 7.1 billion ($1.2 billion) to NOK 6.9 billion ($1.15 billion), and has decreased by NOK 1 billion ($167 million) so far this year, mainly as a result of cash flow from operating activities and asset sales. “Our financial room for manoeuvre is clearly improved over the last two years, as debt has been cut by over 30% or around NOK 3 billion ($500 million),” says Ombudstvedt. The loss after tax was NOK 91 million ($15.2 million), compared with a loss of NOK 280 million ($46.7 million) in the same quarter last year. Operating revenue was NOK 4.4 billion ($730 million), compared with NOK 4.5 billion ($757 million) in the same quarter last year. Sales of the Follum industrial area in Hønefoss and Norske Skog's mill at Bio Bio in Chile were completed during the quarter. After quarter end, an agreement has been entered into with H2 Equity Partners (Netherlands) for the sale of the mill at Parenco in Renkum, Netherlands. The transaction will have little operational impact on the rest of Norske Skog. The sale will be finalized and recognised in Norske Skog's financial statements in the 3Q 2012. Despite the economic downturn in Europe, margins in the second half of the year are expected to be in line with the first half. Norske Skog expects somewhat higher sales volumes in the second half as a result of seasonal variations, but the group will actively adjust production capacity to match market demand. Efforts to reduce fixed costs and net interest-bearing debt will continue. Norske Skog has positioned itself as one of the world’s largest suppliers of newsprint and an important source of paper for the magazine and directory sectors.