Holmen Interim report January-June 2010

August 11, 2010 by timbercommunity

Profit after tax for January–June 2010 was SEK 312 million (January–June 2009: SEK 501 million). Operating profit amounted to SEK 588 million (787). Earnings were better than analysts expected. Holmen Paper’s profit deteriorated considerably as a result of lower newsprint prices. Profitability in the Group’s other business areas improved.

• Earnings per share reached SEK 3.7 (6.0). Return on equity totalled 3.8 per cent (6.5).
• Demand for newsprint in Europe remained weak in the second quarter. The virgin fibre board market was robust and deliveries from European producers to Europe rose by 11 per cent during the first six months of the year compared to the same period in 2009.

 
 

Demand for newsprint in Europe remained weak in the second quarter. In the first six months of 2010 deliveries were 2 per cent higher compared to the low level for the same period in the preceding year. Imports from North America to Europe fell, while European exports to Asia rose. Prices in Europe are significantly lower than in 2009.

Demand for MF Magazine in Europe was 11 per cent higher in the first six months than in the same period last year. Demand for SC paper fell by 2 per cent, but rose by 11 per cent for coated printing paper.

Holmen Paper’s deliveries increased to 840 000 tonnes, compared to 834 000 tonnes for the first half of 2009. Deliveries were unchanged from the first quarter.

Holmen Paper’s operating loss for January–June amounted to SEK -348 million (profit 267). The deterioration is mainly due to lower selling prices. Profits were also adversely affected by higher prices for recovered paper and pulp. The shortage of recovered paper has entailed certain production limitations.

Compared with the first quarter operating loss decreased by SEK 8 million to SEK -170 million. Increased production and seasonally lower
energy costs had a positive impact on the result, but this was counteracted by higher recovered paper costs.

In June, negotiations began on reducing the workforce at Hallsta Paper Mill by about 150 employees. No provision for costs relating to this
has yet been made.