Strong earnings for Bergs Timber AB

June 29, 2010 by timbercommunity

Rising prices of sawn timber has made that Bergs Timber AB has turned loss into profit according to the interimreport September 1, 2009 - 31 May 2010.  Improved earnings compared to the same period last year mainly due to improved selling prices for lumber and increased circulation of products. Negative factors were increased raw material costs and lower production and offloading earnings. 
So far in 2010 according to statistics forest industries increased production of sawn timber in Sweden by 6 percent and in Finland by 27 percent compared to same period last year. Reports of increased production will also be from other major producing countries such as Germany and Austria. Stocks, however, remain comparatively low but is approaching normal levels. 

Market
Stocks in Swedish sawmills are at the end of May 6 percent lower compared to twelve months ago and at the Finnish sawmills, by contrast, stocks have increased by 10 percent compared with the corresponding period of twelve months ago. Since last spring, the market has been relatively strong and prices have gradually been increased. This allowed the currency to strengthen the Swedish currency has been since the summer of 2009 against the Euro, 12 percent, and against the British pound, 8 percent, has gone to compensate by increasing prices in local currency. 
Construction is continuing at a low level in both Europe and the U.S.. However, there are signs that the economy, including construction, bottomed out in most countries. The improvement is slow and from a low level. It is therefore concerned to see the newly developed debt crisis in a number of European countries and of very high danger that the increased construction activity will slow down. At the risk of output growth becomes too vigorous in relation to the increase in consumption of wood products are risks to the stability that now prevails in the timber market may be jeopardized. 
The strong demand for pulpwood and pulp chips together with the general upward movement of prices on market pulp creates expectations of improved prices. The harsh winter has also brought a good outlet for our fuel products. 
Decisive factors for the future timber market development is whether the increase in consumption of wood is equal to the increase in production. Other factors affecting performance is Timber's exchange rate trends and how the commodity balance will be developed. 
 
Interim Report September 1, 2009 - 31 May 2010's Timber AB (publ)
Net sales amounted to SEK 675.6 (571.8) million, operating income was 19.6 (-44.8) million, which resulted in a profit after financial items 12.2 (-55.6) million.
- Profit after tax was 9.4 (-39.2) million, which resulted in a profit per share after tax by 1.36 (-5.68) SEK. 
- Earnings were affected by exchange rate differences reported by 2.3 (-2.0) million. 
- Cash flow from operating activities amounted to 3.2 (13.4) million. 
- Production of sawn timber decreased by 9 percent during the nine month period compared to same period last year. Scarcity of raw material in the autumn and a harsher winter than usual have been limiting factors. 
- Determining factors for the future timber market development is whether the increase in consumption of wood is equal to the increase in production. Other factors affecting performance is Timber's exchange rate trends and how the commodity balance will be developed.
Third Quarter (March 1, 2010 - 31 May 2010)
- Net sales amounted to SEK 295.4 (228.4) million in the third quarter. Profit after financial items was 6.1 (4.7) million, which resulted in a profit per share after tax by 0.66 (0.50) kronor.
- The improved earnings in the third quarter compared with same period last year mainly due to improved selling prices for lumber as well as increased sales of products has helped. In contrast, increased raw material costs had a negative impact.
- Third quarter results were affected by exchange rate differences reported by -2.1 (9.5) million.
- Production of sawn timber decreased by 2 percent in the third quarter and deliveries of wood products increased 7 percent compared with same period last year.