$4.9 Million Investment in Kedgwick, NB

Operating profit for January–June 2017 was SEK 1 152 million (January–June 2016: SEK 1 063 million, excluding items affecting comparability). The improvement in earnings was due to higher wood product prices, better earnings from forests and the divestiture of the newsprint mill in Madrid. Compared with the first quarter, operating profit decreased by SEK 102 million to SEK 525 million as a result of a maintenance shutdown within paperboard and seasonally lower hydro power production. Profit after tax for January–June amounted to SEK 880 million (587), which corresponds to earnings per share of SEK 10.5 (7.0). Return on capital employed increased to 9.4 (8.4) per cent. Production of paperboard, paper and wood products has been established at a higher level than previous years and the sales mix has developed well. Cash flow was strong and largely covered the SEK 1 billion dividend that was paid in April.

Mercer International Inc. announces that it has received the decision of the tribunal in respect of its previously announced claim against the Government of Canada under the North American Free Trade Agreement. In a split decision, a majority of the tribunal ruled that it lacked jurisdiction to decide certain of the Company's claims under NAFTA and, with respect to the Company's other NAFTA claims, that they were highly complex and technical and that it would be inappropriate for the tribunal to re-determine matters calling for specialist judgment and, as a result, there was no violation of NAFTA. As is customary in these matters, the tribunal awarded costs to Canada of approximately $6.9 million. Click Read More below for additional information.

The German Felix Schoeller Group sources a small part of its raw material demand of titanium dioxide and starch from the Ukraine. We are currently working on alternative sources to secure our supply. In addition, one of our TiO2 suppliers obtains part of its raw material from the Ukraine. This source is also disrupted. We are working at full speed on the resulting consequences and will inform you shortly. As an energy-intensive company, we are highly dependent on gas and electricity. More than 50% of German natural gas imports are sourced from Russia. We do not expect any bottlenecks in the short term. Nevertheless, we are currently examining possible alternatives to secure our energy supply. We are currently seeing unprecedented prices and very high volatilities in the energy markets. This will therefore also influence our pricing policy.