Displaying items by tag: Rottneros

In response to today’s article in Dagens Industri, Rottneros denies that any assignment has been given to advisors to dispose of any of the Group’s pulp mills. However, and as previously communicated, we are conducting active discussions about finding new use for the CTMP equipment from the closed Utansjö Mill.

For further information please contact:
Ole Terland, CEO and president, Rottneros AB, +46 8 590 010 00

Rottneros discloses the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. The Information was submitted for publication on Wednesday, 4 January 2012 at 10.45 CET (the Swedish version was released at 09.30 CET).

Rottneros is an independent producer of market pulp. The Group comprises the parent company Rottneros AB, listed on NASDAQ OMX Stockholm, and its subsidiaries Rottneros Bruk AB and Vallviks Bruk AB with operations involving the production and sale of market pulp. The Group also includes the wood procurement company Rottneros Baltic SIA in Latvia. The Group has around 308 employees and had a turnover of approximately SEK 1.7 billion in the 2010 financial year.

Today, the Rottneros Group has announced a planned reduction of staff that will affect about 25 employees at Rottneros Mill. Negotiations with union organisations will commence immediately. The mill is running at a loss, primarily as a result of a weak market for both groundwood pulp and CTMP, which are the kinds of pulp produced at this mill.

The Group does not envisage any rapid improvement on account of the weak growth on the part of our customers within the printing paper sector, which are the largest purchasers of the mill’s pulp. Rottneros Mill has taken downtime during the year and is planning further shutdowns during the autumn as a consequence of this weak market.

These planned reductions form part of an improvement programme, which also includes changes to our range and other reductions in respect of production costs. It is intended that the cost of these measures be carried in the Group’s result for the fourth quarter of 2011. Our objective is for these measures to be implemented gradually up to and including the summer of 2012.

“It is regretful that we are compelled to take measures that have an adverse effect on our employees and their families, but we cannot continue to run the mill at a loss,” explains Olle Dahlin.

Plans to commence the production of refined biofuel at Rottneros Mill in cooperation with joint venture partners will not be affected by the measures announced.

The Rottneros Group’s other manufacturing unit, Vallvik Mill, which manufactures chemical pulp, is showing good profitability, primarily on account of a strong market.

Rottneros has concluded a new agreement for operations financing with Danske Bank. Under the agreement Danske Bank will take over the operations financing arrangement previously placed with a bank consortium comprising five banks, where Danske Bank was one of the participating banks.

The agreement, which enters into force on 31 January 2011, does not contain any covenants.

For further information please contact:
Tomas Hedström, Chief Financial Officer, tel +46 8 590 010 00

Rottneros discloses the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. The Information was submitted for publication on Monday, 10 January 2011 at 13.15 CET.

The Board of Rottneros AB has decided to invest in closing the water loops in the bleaching plant at Vallvik Mill at a cost of SEK 90m. This investment comprises the final part of the programme of measures previously communicated in, for instance, the new share issue prospectus in 2009. The closure of the bleaching plant will significantly reduce water usage. One important consequence of this is that the biological external water purification plant that is currently being built can be kept significantly smaller. There will also be a slight reduction in the cost of power and chemicals.

The agreed investments will help Vallvik Mill to meet the extended requirements for water purification that will apply from 2012. These investments will also lead to a twenty per cent increase in capacity at the factory, from 200,000 to 240,000 annual tonnes of sulphate pulp. The current production permit is limited to 220,000 annual tonnes and a request for a temporary extended permit for 242,000 annual tonnes has already been submitted to the relevant environmental authorities.

For further information please contact:
Ole Terland, Chief Executive Officer and President, +46 8 590 010 00
Robert Jensen, Managing Director, Vallviks Bruk AB, +46 270 620 00

The CTMP line at Rottneros Mill has been at a standstill for around ten days, which corresponds to a loss of production of approximately 2,500 tonnes. The stoppage is due to the combination of extremely high electricity prices and high timber costs resulting in sales of marginal volumes being unprofitable. The strong Swedish kronor also contributes to reducing export margins. The production volume for the remaining part of December depends on how these factors develop.

The production line for groundwood pulp at Rottneros Mill has not been affected by the stoppage. The Group's other manufacturing unit, Vallvik Mill, which produces chemical pulp, is not as sensitive to electricity prices and is being run at full capacity.

For further information please contact:
Ole Terland, Chief Executive Officer and President, +46 8 590 010 00

The shutdown for maintenance work and to implement investments approved for Vallvik Mill, which lasted for a period of almost three weeks, has now come to an end and production is back on track. The two investments agreed at the end of 2009 and the beginning of 2010 respectively have been connected and put into operation. These investments involved replacing the remaining old part of the evaporation plant and also substantially improving air regulation in the recovery boiler. Their total cost amounted to around SEK 130m.

"We have now eliminated production bottlenecks, thereby increasing the capacity of the mill from 200,000 to 220,000 tonnes per year," says Robert Jensen, MD of Vallvik Mill. The investments will also result in reduced emissions.

"It is particularly gratifying", continues Jensen, "that all work during the shutdown, which employed almost 600 people went according to plan and that costs were within budget. We will now prove that we can supply what we have promised and look forward to the next stage of our development at the Vallvik factory".

For further information please contact:
Robert Jensen, Managing Director of Vallvik Mill, +46 270 620 00

Rottneros discloses the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. The Information was submitted for publication on 3 November 2010 at11.30 CET.

(For table, see attached file)

* Profit after net financial items amounted to SEK 125 (-69) million for the period January to September 2010. Operating profit amounted to SEK 123 (-172) million for the first nine months of 2010. Profit after net financial items amounted to SEK 64 (43) million for the third quarter of 2010.

* Cash flow from operating activities amounted to SEK 163 (85) million for the period January to September 2010.

* An interest-bearing net receivable of SEK 116 million was reported as at 30 September 2010, compared with SEK 10 million at the start of the year

* Demand for pulp continues to be good, although the strong krona has led to a reduction in net proceeds.


CEO's statement

Rottneros' profit before tax amounted to SEK 64 million in the third quarter of the year, which was about 30 per cent higher than the previous quarter. Return on capital employed for the quarter amounted to 21 per cent. Vallvik Mill was producing at full steam during the quarter, while Rottneros Mill had its planned long holiday break. The negative impact of this shutdown on the quarterly result amounted to almost SEK 10 million. Production at both mills has been excellent and the quality of the outcome has been very good. During the quarter, the board approved the investment in a biological water treatment plant at Vallvik Mill, which has been under discussion for a long time. The plant will be installed in 2011 and be fully operational towards the end of the year.

A lot of preparatory work was done at Vallvik Mill prior to the extended shutdown in the autumn, which is taking place now in October and will last for almost three weeks. Preparations included building up stock levels to cover the supply of customers during the standstill. The negative impact that the loss of production and major periodic maintenance work will have on the result for the last quarter of the year will be approximately SEK 35 million.

As I wrote in my last CEO statement, the fairly weak demand for pulp in China in 2010 has now resulted in price reductions for all pulp qualities. Since the summer, the main reference mark for pulp prices – namely NBSK, i.e. bleached long-fibre sulphate pulp – has fallen in China from just under USD 900 to just over USD 800 per tonne. This has resulted in market leaders in North America reducing their price by USD 50 per tonne in their home territory. There has not been a reduction in the official prices of NBSK in Europe, but the weakened dollar in relation to the Euro has given European purchasers of pulp a considerable cost relief. The impact of the strong krona is significant for Rottneros, as our costs are almost entirely in SEK and the underlying revenues are completely dominated by USD. The average USD rate was SEK 7.27 for the third quarter and SEK 6.71/USD at the end of the quarter, a change of eight per cent.

Several leading pulp market observers consider that this price reduction is less than previously anticipated, which may be due to a combination of a weaker dollar rate, an increase in purchases from China and increased paper production in Europe. These observers expect that pulp prices rise again after the turn of the year, at least in dollars.

Ole Terland
President and CEO

The Annual General Meeting for 2010 resolved to have the following composition for the Nomination Committee prior to the Annual General Meeting for 2011: the Chair of the Board, who shall not chair this Committee, and two additional members, one of whom will represent the company's largest shareholder and the other who will represent one of the company's four largest shareholders.

Olle Grundberg, Nemus Holding AB, has thereby been appointed as Chair of the Nomination Committee together with Jan Alkmark, Danske Bank A/S, Danmark, Sverige Filial, and Kjell Ormegard, Chair of the Board of Rottneros AB.

According to the instruction resolved by the general meeting, it is the duty of the Nomination Committee to prepare and present proposals to the general meeting for: the election of a chair and other board members; the board fee to be divided between the chair and other board members together with any remuneration for committee work; the election of and fee for an auditor, when applicable; and the election of a chair at the annual meeting of shareholders (AGM).

Shareholders wishing to submit views or present a proposal to the company's Nomination Committee may do so to the Chair of the Nomination Committee, Olle Grundberg, This email address is being protected from spambots. You need JavaScript enabled to view it..

The Annual General Meeting will be held on Tuesday, 19 April 2011 at Sunne.

For further information, please contact:
Chairman of the Nomination Committee, Olle Grundberg, mobile +46 70 654 44 20
Chairman of the Board, Kjell Ormegard, mobile +46 70 668 93 76

• Profit after net financial items amounted to SEK 61 (-112) million for the first half of 2010. Operating profit amounted to SEK 55 (-102) million for the first six months of the year. Profit after net financial items amounted to SEK 50 (3) million for the second quarter of 2010.

• Cash flow from operating activities amounted to SEK 134 (34) million during the first half of 2010.

• An interest-bearing net receivable of SEK 101 million was reported as at 30 June 2010, compared with SEK 10 million at the start of the year.

• The pulp market has been strong and demand has improved during the period. Pulp prices have gradually been increased throughout the first six months of the year.

CEO's statement

Profit was SEK 50 million in the second quarter, representing a clear improvement on the first quarter (SEK 11 million). Return on capital employed for the quarter amounted to 17% and operating cash flow amounted to SEK 44 million. These are welcome figures after the major redeployment work we were obliged to implement in recent years. As previously reported, we were compelled to stop work at our sulphate factory in Vallvik late May/early June on account of the old part of the evaporation plant – which is being replaced in the autumn – getting clogged up. The cost of this amounted to almost SEK 15 million, primarily owing to production losses.

The strong improvement to our result is of course mainly attributable to the favourable pulp market. However, as is often the case, when the price of pulp increases the price of wood also drifts upwards, restricting the increase in profit. It has been possible to implement successive pulp price increases the price of pulp over the year and we are now at a historically high level. Demand has been strong up until now, both in North America and Europe, with increases of almost 15% compared to the weak start last year. On the other hand, the relatively firm trend in 2009 for supplies to China saw a strong reversal (down approximately 20%). Certain Chinese macro indicators are pointing downwards and importers' trade prices for pulp in China have fallen over the past few weeks.

We have low sales volumes in China and have not felt any adverse effects of this slowdown. We note that stock levels are low; that customers want to buy more than we can manufacture and all of our price increases during the year, including those for June, have been accepted. We remain optimistic, despite certain warning signals. Both the American and European paper mills have good order books. If the improvement of the business cycle continues, also the weakest part of the paper market, namely printing paper, continues to recover underpinned by the advertising market, in spite of the continual growth of the Internet.

We are in the midst of intensive improvement work at Vallvik Mill and decided investments in the evaporation plant and the recovery boiler will be carried out in conjunction with the October shutdown, which has been extended this year to almost three weeks to allow these investments. This will provide an initial increase in capacity of 10% and facilitates further increases.

Our South Africa Project, which involves a new factory being built together with local partners using some of the equipment from our former mill at Utansjö, has been affected by further delays owing to increased guarantee demands on the part of our cooperating partners. The demands now presented go beyond what we consider to be reasonable, for which reason it now appears less certain that the project will in fact be implemented. We have consequently intensified our work on alternatives to this project, calling for some other use for our equipment and skills to be found.

We also continued during the spring to study our capacity to increase production of bio products. We currently manufacture both tall oil and green electricity at Vallvik Mill in addition to various 'renewable' pulp products. The new areas that interest us most and which we believe might be suitable for our mill are the manufacture of, within the range of energy fuels, another more refined form of pellets or alternatively methanol and possibly the production of considerably more green electricity with the aid of new technological developments. This may entail substantial investment and our main approach will be to find suitable cooperating partners.

We see an exciting future ahead of us …

Ole Terland
President and CEO

(For full report, including tables, see attached file)