Norske Skog: Profitability normalising in challenging environment

Norske Skog’s EBITDA in the fourth quarter of 2021 was NOK 422 million, an increase from NOK 111 million in the third quarter of 2021. Sales prices for all grades increased in the quarter as a necessary consequence of unprecedented high energy costs in Europe and a tightened publication paper market situation following significant capacity closures and post Covid-19 demand recovery. The European mills operated at full capacity during the quarter.

“The substantial price increases in the European markets during the fourth quarter were a direct consequence of the unprecedented volatility and price level in the European energy market, and was necessary following several quarters of low or negative cash flows. Following significant capacity closures in the industry over the past 18 months, the demand for publication paper now exceeds available capacity,” says Sven Ombudstvedt, CEO of Norske Skog.

Cash flow from operations was NOK 317 million in the quarter compared to NOK -99 million in the previous quarter, positively impacted by the improved operating margins, change in working capital and sale of CO2-allowances, but negatively impacted by employee redundancy payments at the Tasman mill in New Zealand. Operating earnings in the fourth quarter of 2021 were NOK 479 million compared to operating earnings in the third quarter of 2021 of NOK -565 million.

Net profit in the quarter was NOK 400 million compared to a net loss of NOK 602 million in the previous quarter. Net interest-bearing debt was NOK 1 054 million at the end of the fourth quarter, with an equity ratio of 34%.

Following the end of the quarter, Norske Skog entered into an agreement with Talley’s Group, a New Zealand-based food company, to sell the Nature’s Flame pellets company for a consideration of NZD 47.8 million, which is approximately NOK 280 million. The transaction is expected to close during the first quarter of 2022.
further detail at: https://www.norskeskog.com/investors/press-releases/english-press-releases/profitability-normalising-in-challenging-environment?PID=4684&M=NewsV2&Action=1

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