In This Article:
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Revenue Growth: Increased turnover by 4% in Q2 2024.
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EBIT: SEK30 million for Q2 2024, down from SEK41 million in Q2 2023.
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Sales Volume: 7% higher sales volume, driven by CTMP production.
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Net Debt Position: First net debt position since 2021 due to investment program.
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Available Liquidity: SEK298 million at the end of the period.
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Equity to Assets Ratio: 64% at the end of the period.
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Investment Spending: SEK135 million in Q2 2024; SEK216 million year-to-date.
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Long-term Financing: Up to SEK200 million secured for solar panels and batteries.
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Production Records: New production records for mechanical pulp.
Release Date: July 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Rottneros AB (OSTO:RROS) achieved a new production record for mechanical pulp in Q2 2024.
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The company reported a 4% increase in turnover, ending the quarter with an EBIT of SEK30 million.
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Strong market conditions in Europe and the US contributed to rising prices for softwood kraft pulp.
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Rottneros AB (OSTO:RROS) has secured long-term financing for its solar panels and battery investments, supported by a green credit guarantee.
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The company is focusing on niche markets, such as fiber cement and molded fiber trays, which are seeing increased demand.
Negative Points
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Rottneros AB (OSTO:RROS) experienced a decrease in EBIT from SEK41 million in Q2 2023 to SEK30 million in Q2 2024.
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The company faced production issues in the first quarter, impacting sales of NBSK and UKP pulp.
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Pulpwood prices are at record highs, affecting profitability.
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The company has moved some maintenance CapEx forward due to a rocky start to the year, increasing total CapEx to SEK430 million.
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Rottneros AB (OSTO:RROS) has transitioned from a net cash position to a net debt position due to ongoing investments.
Q & A Highlights
Q: The result was weighed down by a negative mix effect, such as more CTMP deliveries where prices have not risen as much. How do you see the mix in the coming quarters? A: The mix is dependent on production capabilities. CTMP was higher due to good production, while NBSK and UKP were low due to first-quarter issues. We expect normalization with good production in both mills and future capacity increases in Rottneros Mill for CTMP, improving profitability.
Q: The pulp prices are at an all-time high, but your earnings are far from it. What's holding you back, and how will you capitalize fully on the increased prices? A: We focus on niches with good profitability and stable customers to capitalize on prices. There's a time lag with our sales prices, but we expect increases. Earnings are also affected by costs, with record-high wood pulp prices impacting profitability.