Norske Skog: Improved sales prices partly offset by higher variable cost

Norske Skog’s EBITDA in the third quarter of 2021 was NOK 111 million, an increase from NOK 17 million in the second quarter of 2021. Sales price increases in the quarter were offset by unprecedented increases in raw material costs, in particular energy. The utilization rate was very high due to a tightened market for publication paper following significant capacity closures and post Covid-19 demand recovery across all grades. Following the quarter, Norske Skog successfully financed the EUR 350 million containerboard conversion investment with debt facilities of EUR 265 million.

The substantial capacity closures have eliminated the imbalance in both the newsprint and magazine paper markets. There have been substantial price hikes in the European markets during the third quarter caused by the unprecedented volatile energy and raw material costs situation currently experienced in Europe. These cost increases are expected to continue and may necessitate further price increases in the fourth quarter of 2021 and into 2022,” says Sven Ombudstvedt, CEO of Norske Skog.

Cash flow from operations was NOK -99 million in the quarter compared to NOK -190 million in the previous quarter, negatively impacted by employee redundancy payments in the quarter of NOK 129 million at the Tasman mill in New Zealand. Operating earnings in the third quarter of 2021 were NOK -565 million compared to operating earnings in the second quarter of 2021 of NOK -277 million. The quarter was negatively affected by non-cash changes in fair value of energy contracts in Norway amounting to NOK -551 million. Net loss in the quarter was NOK 602 million compared to a net loss of NOK 355 million in the previous quarter. Net interest-bearing debt was NOK 1 052 million at the end of the third quarter, with an equity ratio of 35%.
details at: https://www.norskeskog.com/investors/press-releases/english-press-releases/improved-sales-prices-partly-offset-by-higher-variable-cost?PID=4241&M=NewsV2&Action=1

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