Rottneros is reporting a positive 9-month result after net financial items of SEK 6 million for the year. Cash flow after investments and net financial income was also SEK 6 million. The customary four-week vacation shutdown at Rottneros Mill together with the annual maintenance shutdown at Vallvik Mill, which predominantly fell in September this year, had a significant effect on the result for the third quarter. The quarterly result was burdened with approx. SEK30million owing to these shutdowns.

•  Income after net financial items amounted to SEK 6 (-76) million for the period January to September 2012. The result for the previous year incurred total write-downs and one-off costs of SEK -148 million.

•  Income after net financial items amounted to SEK -26 million for the third quarter of 2012 compared to a profit of SEK 16 million for the same quarter of the previous year, excluding write-downs and one-off costs. There was a vacation and maintenance shutdown respectively at Rottneros Mill and Vallvik Mill during the third quarter of 2012. The maintenance shutdown at Vallvik, which in previous year took place during the fourth quarter, had a negative effect on the result of SEK 25 million.

•  Cash flow from current operations amounted to SEK 14 (27) million for the third quarter of 2012 and SEK 49 (57) million for the period January to September 2012.

The summer downturn was unusually severe this year for Swedish pulp producers such as Rottneros. There was a global fall in USD market prices, which had a major impact when added to the significant rise in the value of the Swedish kronor. The market price of our dominant product, NBSK (or chemical softwood pulp), is monitored via the PIX index, which is published weekly, and this price indicator was approx. SEK 5,000 per tonne for Europe at the end of September compared with approx. SEK 6,000 per tonne at the end of May and approx. SEK 5,700 per tonne at the beginning of the year. We now envisage an upward turn in price trends for the final quarter of this year. List prices in Asia have increased twice by USD 20 per tonne. In North America, which has the highest price level, the list prices increased by USD 20 per tonne and in Europe by approx. USD 30 per tonne. Nor was the Swedish krona as strong as it was in August, which means that revenues should now rise again.

Developments have been favourable for us on the cost side, with falling timber and electricity prices as well as fixed costs.  We must learn to live with being a high-cost country in an extremely competitive world. Our only protection will be our own competitiveness, including continuous productivity improvements. The continuous rationalisations that have taken place in recent years, including staff reductions, mean that we are not planning any further downsizing or closures at the current time. However, our focus on efficiency and improved customer offerings is stronger than ever. We are obviously pleased in this connection about the permit allowing an increase in production at Vallvik Mill to 242,000 tonnes in three years. This in itself will facilitate a significant improvement in efficiency. The Swedish Environmental Protection Agency has however appealed against this decision.

During the quarter just ended, the world’s largest CTMP supplier shut down a major plant in Canada and in Europe Södra announced that they were withdrawing from the CTMP market. This will entail the disappearance of around 10% of global capacity and significantly more of the current CTMP supplies to the European market. Hopefully this reduction on the supply side of mechanical pulp will result in improved price formation. These pulps have unique quality characteristics that are of value to paper and board makers and over time must be priced so that manufacturers also continue in existence.