Higher capacity utilisation as market tightens

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Norske Skog’s EBITDA in the first quarter of 2021 was NOK 112 million, a decrease from NOK 146 million in the fourth quarter of 2020.

The markets are still impacted by the Covid-19 imposed restrictions, but are expected to improve during the year as a result of both already effectuated, but also newly announced capacity closures. As announced earlier today, Norske Skog’s board of directors has made a EUR 100 million investment decision to convert one machine at the Bruck (Austria) industrial site from newsprint to recycled containerboard production. This is the first major step of the two planned European conversion projects in the group’s strategy of establishing Norske Skog as a leading independent European producer of recycled containerboard. 

- Although the corona restrictions still have a negative impact on our operations, we are cautiously optimistic about the future. The decision to convert the Bruck newsprint machine into packaging will diversify our asset base and create new long-term revenue and cash flows from the end of 2022. Our other fibre and energy projects are progressing according to plan, and will contribute to a long-term sustainable industrial platform. Due to substantial capacity closures announced over the last twelve months, we expect the publication paper market to improve during 2021, says Sven Ombudstvedt, CEO of Norske Skog. 

Cash flow from operations was NOK 163 million in the quarter compared to NOK 73 million in the previous quarter, mainly due to a reduction in working capital related to Norwegian CO2-compensation received for 2020 in the quarter. Operating earnings in the first quarter of 2021 were NOK 204 million compared to operating earnings in the fourth quarter of 2020 of NOK -1 276 million. The quarter was positively affected by non-cash change in fair value of energy contracts in Norway and New Zealand amounting to NOK 199 million. Net profit in the quarter was NOK 194 million compared to a net loss of NOK -1 363 million in the previous quarter. Net interest-bearing debt was NOK 401 million at the end of the first quarter, with an equity ratio of 43 %. 

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Source: Norske Skog

 

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