*Operating profit for January–March was SEK 653 million (January–March 2017: SEK 627 million). Operating profit includes a forest property sale of SEK 70 million. Prices for paper and wood products increased, wheras costs for wood and other input goods rose.
*Compared with the fourth quarter of 2017, profit was SEK 232 million higher, mainly as a result of income from the forest property sale and due to that fourth-quarter earnings were affected by a maintenance shutdown.
*Profit after tax for January–March amounted to SEK 507 million (485), which corresponds to earnings per share of SEK 6.0 (5.8).
*Return on capital employed was 10.5 (10.2) per cent.
*Net debt decreased by SEK 368 million to SEK 2 568 million.
*The 2018 AGM approved a dividend of SEK 13 (12) per share and a 2:1 share split, whereby each share is divided into two shares.
CEO comments:
During the first quarter we were able to raise prices for most of our products. However, costs of key input goods are rising. Earnings were at a good level for the Holmen Group overall, but the performance of the Paperboard business area is disappointing.
We have a strong market position in Paperboard and over the past year we have established a volume that is 10 per cent higher than before. Despite this, profit decreased as a result of high costs due to rising commodity prices, high consumption of input goods and increased fixed costs. Focus for the new management of the business area is to reduce costs yet developing sales. An opportunity to increase paperboard production by another 20 per cent through investments at Iggesund Mill has been identified. This potential is currently being verified and the goal is to make an investment decision within a year.
Difficult winter conditions this year resulted in major challenges in both harvesting and transporting wood from the forest to our mills. Through significant efforts, we have to a large extent been able to achieve full production at our mills. The cost of purchasing pulpwood has however increased by SEK 60 million compared with the fourth quarter as a result of large volumes being acquired from far away and increasing prices. The cost increase for saw logs in the quarter was limited. Our own forests were also affected by the winter weather, resulting in somewhat higher costs and lower harvesting.
Within Paper, we have been working for a long time on reducing costs and increasing deliveries of magazine and book paper. During the first quarter we have continued to improve the product mix and the share of magazine and book paper is now almost up to 90 per cent. Prices increased but this was offset by higher raw material costs.
When it comes to Wood Products, we have gradually increased the level of value added. During the quarter a wood treatment plant at Braviken entered service, which will increase deliveries to Swedish builders’ merchants. Prices have increased over the past two years, more than making up for higher costs for logs.
The cold winter periodically resulted in high electricity prices. In order to benefit from this, we produced more hydro power than usual, realising the potential of balancing rising energy costs in our industry.
more detail at: http://vp087.alertir.com/files/press/holmen/201804250451-1.pdf