Quarterly Report • Feb 4, 2022
Quarterly Report
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Norske Skog is a world leading producer of publication paper with strong market positions in Europe and Australasia. Publication paper includes newsprint and magazine paper. Norske Skog operates five mills in four countries. Norske Skog has an annual publication paper production capacity of 2.1 million tonnes. Four of the mills are in Europe and one in Australia. Newsprint and magazine paper are sold through sales offices and agents to over 80 countries. The group has approximately 2 150 employees. Of the four mills in Europe, two will produce recycled containerboard following conversion projects.
In addition to the traditional publication paper business, Norske Skog aims to further diversify its operations and continue its transformation into a growing and high-margin business through a range of exciting fibre and energy projects.
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The parent company, Norske Skog ASA, is incorporated in Norway and has its head office at Skøyen in Oslo. The company is listed on Oslo Stock Exchange with the ticker NSKOG.
| NOK MILLION | Q4 2021 | Q3 2021 | Q4 2020 | 2021 | 2020 |
|---|---|---|---|---|---|
| INCOME STATEMENT | |||||
| Total operating income | 3 092 | 2 642 | 2 476 | 10 315 | 9 612 |
| EBITDA* | 422 | 111 | 146 | 662 | 736 |
| Operating earnings | 479 | -565 | -1 276 | -160 | -1 339 |
| Profit/loss for the period | 400 | -602 | -1 363 | -363 | -1 884 |
| Earnings per share (NOK)** | 4.24 | -6.38 | -14.46 | -3.85 | -19.99 |
| CASH FLOW | |||||
| Net cash flow from operating activities | 317 | -99 | 73 | 191 | 549 |
| Net cash flow from operating activities per share (NOK)** | 3.36 | -1.05 | 0.77 | 2.02 | 5.82 |
| Net cash flow from investing activities | -326 | -168 | -217 | -891 | 302 |
| OPERATING MARGIN AND PROFITABILITY (%) EBITDA margin* |
13.6 | 4.2 | 5.9 | 6.4 | 7.7 |
| Return on capital employed (annualised)* | 8.1 | -20.8 | -8.6 | -7.8 | 2.1 |
| PRODUCTION / DELIVERIES / CAPACITY UTILISATION | |||||
| Production (1 000 tonnes) | 490 | 490 | 476 | 1 921 | 1 800 |
| Deliveries (1 000 tonnes) | 489 | 501 | 500 | 1 952 | 1 825 |
| Production / capacity (%) | 95 | 95 | 81 | 89 | 77 |
* As defined in Alternative Performance Measures
**Adjusted for the share issuance on 5 February 2021 pursuant to which the number of shares was increased from 82 500 000 to 94 264 705
| NOK MILLION | 31 DEC 2021 | 30 SEP 2021 | 31 DEC 2020 |
|---|---|---|---|
| BALANCE SHEET | |||
| Non-current assets | 4 538 | 4 154 | 4 084 |
| Current assets | 4 587 | 3 827 | 3 703 |
| Total assets | 9 125 | 7 982 | 7 787 |
| Equity | 3 133 | 2 767 | 3 219 |
| Net interest-bearing debt | 1 054 | 1 052 | 725 |
| NOK MILLION | Q4 2021 | Q3 2021 | Q4 2020 | 2021 | 2020 |
|---|---|---|---|---|---|
| Operating revenue | 2 980 | 2 532 | 2 402 | 9 848 | 9 173 |
| Other operating income | 113 | 110 | 74 | 466 | 439 |
| Total operating income | 3 092 | 2 642 | 2 476 | 10 315 | 9 612 |
| Distribution cost | -291 | -307 | -312 | -1 187 | -1 159 |
| Cost of materials | -1 800 | -1 615 | -1 351 | -6 055 | -5 093 |
| Fixed cost | -580 | -608 | -668 | -2 410 | -2 625 |
| EBITDA | 422 | 111 | 146 | 662 | 736 |
The COVID-19 omicron variant caused new restrictions during the fourth quarter with continuing impact on the global economy. A considerable strain on global supply chains lead to increased costs. Cost for raw materials remained high while prices for energy soared in the fourth quarter. This has resulted in continued and significant cost pressure upwards. Publication paper prices were increased in the fourth quarter 2021, which was necessary to mitigate the effect of higher input costs and to achieve sustainable margins. The publication paper market balance remains tight following significant capacity closures in 2021. Utilisation was 95% for Norske Skog in the fourth quarter of 2021, driven by a tight publication paper market.
Higher operating revenue in the fourth quarter compared to the previous quarter was driven by increases in prices across all grades.
Cost of materials increased significantly compared to the previous quarter, both in total and on a per tonne basis. The main cost increase in the quarter, relates to significant increases in energy prices, both electricity and gas. Recovered paper (RCP) prices have remained at high levels seen also in the previous quarters.
Fixed costs (including employee benefit expenses) decreased slightly compared to the previous quarter, both in total and on a per tonne basis.
EBITDA increased quarter-over-quarter, notably from unsustainable levels in the previous quarter, mainly due to price increases.
| NOK MILLION | Q4 2021 | Q3 2021 | Q4 2020 | 2021 | 2020 |
|---|---|---|---|---|---|
| Restructuring expenses | -12 | -17 | -47 | -192 | -75 |
| Depreciation | -115 | -109 | -112 | -433 | -438 |
| Impairments | 22 | 0 | -258 | 22 | -451 |
| Derivatives and other fair value adjustments | 163 | -551 | -1 006 | -218 | -1 112 |
| Operating earnings | 479 | -565 | -1 276 | -160 | -1 339 |
Restructuring expenses of NOK 12 million relate to an adjustment of the restructuring related to the closure of PM5 at Norske Skog Saugbrugs in 2020. Reversal of impairments of positive NOK 22 million in the quarter relate to the Bruck and Tasman mill.
Depreciation of NOK 115 million is in line with previous quarters.
The fair value of energy contracts in Norway increased compared to the previous quarter because of an increase in expected electricity prices in the market.
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| NOK MILLION | Q4 2021 | Q3 2021 | Q4 2020 | 2021 | 2020 |
|---|---|---|---|---|---|
| Share of profit in associated companies | -5 | -4 | 6 | -18 | -10 |
| Financial items | 5 | -45 | 50 | -118 | -349 |
| Income taxes | -80 | 12 | -142 | -68 | -186 |
| Profit/loss for the period | 400 | -602 | -1 363 | -363 | -1 884 |
Financial items were positive by NOK 5 million in the fourth quarter due to currency gains. Interest cost and other financial costs were in line with the previous quarter. NOK was stronger against EUR for the majority of the fourth quarter compared to the third quarter and ended the quarter slightly stronger than in the previous quarter. Debt denominated in other currencies than NOK was unchanged.
Net interest expenses were in line with previous quarter. The income taxes in the quarter relate to the operations in Norske Skog Golbey and tax for previous years related to the Italian sales office.
In the fourth quarter, Norske Skog announced that it had entered into debt facility agreements with an aggregate amount of EUR 265 million that will fully finance its EUR 350 million investment in recycled containerboard conversion projects. Lenders are leading European banks, partly guaranteed by German export credit agency Euler Hermes and Austria Wirtschaftsservice Gesellschaft - the Austrian Government Promotional and Investment Bank. The commercial terms are attractive and support the highly competitive profile of the containerboard projects. The first containerboard production will commence in Norske Skog Bruck fourth quarter 2022 and put Norske Skog on the path to become a leading European independent producer of recycled containerboard.
The total financing amounts to EUR 265 million, or approximately 75% of the EUR 350 million investment amount, of which EUR 193 million is for the containerboard project at Norske Skog Golbey and EUR 72 million for the containerboard project at Norske Skog Bruck. DNB, Caisse d'Epargne Grand Est Europe and Natixis acted as Joint Mandated Lead Arrangers (MLA) for the financing in Norske Skog Golbey, and Raiffeisenlandesbank OÖ and IKB Deutsche Industriebank acted as MLAs for the financing in Norske Skog Bruck. The facilities will be drawn as capital expenditure is incurred, and repayment is scheduled and expected to commence approximately upon completion of each respective project with average maturity towards the end of 2030. Utilisations are subject to customary conditions precedent for such facilities. The debt financing of EUR 265 million is expected to increase Norske Skog's annual interest costs with approximately EUR 5 million annually once fully drawn.
Production of containerboard will commence during the fourth quarter of 2022 at the Norske Skog Bruck industrial site and during the fourth quarter of 2023 at the Norske Skog Golbey industrial site. The machines are expected to operate at 60-70% utilisation in the first year and reach full utilisation during the third year of production. Once at full utilisation, the machines are expected to generate annual EBITDA of EUR 70-80 million, based on historical prices and margins seen in the market.
Following first commercial sales for CEBINA at end of 2020, the work to qualify CEBINA in coatings, paints and adhesives has continued in the quarter. In October, Norske Skog announced that CEBINA has seen successful commercial entry into a new application for waterbased paints.
The construction of the CEBICO (bio composites) pilot was completed in the fourth quarter of 2021. The pilot has a capacity of 300 tonnes annually and will be key in CEBICO production and for delivering larger qualification test volumes to potential customers.
Following the quarter, Norske Skog announced the sale of the Nature's Flame pellets facility to Talley's in New Zealand for a consideration of approximately NZD 47.8 million. The transaction is expected to be completed during the first quarter of 2022.
Beyond the above-mentioned initiatives, the group continuously works to develop several other fibre and energy related growth projects, both on a stand-alone basis and in partnerships.
| NOK MILLION | Q4 2021 | Q3 2021 | Q4 2020 | 2021 | 2020 |
|---|---|---|---|---|---|
| Total operating income | 2 648 | 2 183 | 1 899 | 8 412 | 7 412 |
| EBITDA | 395 | 113 | 171 | 628 | 659 |
| EBITDA margin (%) | 14.9 | 5.2 | 9.0 | 7.5 | 8.9 |
| Return on capital employed (%) (annualised) | 6.0 | -18.9 | -5.0 | -7.0 | 1.9 |
| Production (1 000 tonnes) | 428 | 428 | 382 | 1 628 | 1 468 |
| Deliveries (1 000 tonnes) | 427 | 433 | 403 | 1 645 | 1 482 |
| Production / capacity (%) | 96 | 96 | 80 | 91 | 77 |
TOTAL OPERATING INCOME EBITDA
The segment consists of Norske Skog's European operations in the publication paper market with industrial sites in Norway, France and Austria. Annual production capacity is 1.8 million tonnes.
Operating income increased from the previous quarter due to higher sales prices.
Distribution costs decreased from the previous quarter on an absolute level and on a per tonne basis driven mainly by a reduction of export volumes in the quarter. Cost of materials increased significantly in total and on a per tonne basis, mainly due to higher energy prices in the quarter. Employee benefit expenses were in line with the previous quarter.
The price increases for publication paper in the quarter were necessitated by increasing cost of materials but impacted positively by increasing EBITDA in the quarter from the unsustainable levels in previous quarters.
Demand for standard newsprint in Europe decreased by 4 % as of November 2021 compared to the same period last year. Magazine paper demand at same level as last year, with super calendared paper decreasing 1 % and lightweight coated paper increasing 2 %. (Source: Eurograph).
Capacity utilisation was 96% in the period, in line with the previous quarter of 96%.
EUROPE EUROPE
| NOK MILLION | Q4 2021 | Q3 2021 | Q4 2020 | 2021 | 2020 |
|---|---|---|---|---|---|
| Total operating income | 395 | 426 | 526 | 1 792 | 2 106 |
| EBITDA | 46 | 0 | -13 | 44 | 106 |
| EBITDA margin (%) | 11.6 | 0.0 | -2.5 | 2.5 | 5.0 |
| Return on capital employed (%) (annualised) | 117.3 | -41.0 | -45.6 | 9.0 | 16.6 |
| Production (1 000 tonnes) | 62 | 62 | 94 | 292 | 332 |
| Deliveries (1 000 tonnes) | 62 | 68 | 97 | 308 | 343 |
| Production / capacity (%) | 87 | 87 | 87 | 79 | 76 |
The segment consists of Norske Skog's publication paper operations in Australasia. The annual production capacity is 0.3 million tonnes. The Norske Skog Boyer mill is the only domestic publication paper producer in the region.
Operating income decreased slightly compared to previous quarter due to lower delivery volumes, partly offset by price increases.
Distribution costs were in line with the previous quarter on an absolute level but increased on a per tonne basis due to higher transportation costs. Cost of materials decreased in the quarter due to lower sales volumes, but also on a per tonne basis due to slight reduction in energy and raw material costs. Employee benefit expenses decreased in total
and on a per tonne basis, mainly due to cessation of production at Norske Skog Tasman taking place during the previous quarter.
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EBITDA increased compared to the previous quarter, due to price increase in the quarter as well as a reduction in environmental provisions.
Demand for newsprint in Australasia increased by 6 % as of December 2021, compared to the same period last year. (Source: official statistics).
Capacity utilisation was 87% in the period, in line with the previous quarter.
| NOK MILLION | Q4 2021 | Q3 2021 | Q4 2020 | 2021 | 2020 |
|---|---|---|---|---|---|
| Total operating income | 71 | 61 | 68 | 228 | 204 |
| EBITDA | -19 | -2 | -12 | -11 | -29 |
| 526 489 482 400 426 395 300 200 100 0 OTHER ACTIVITIES |
30 20 10 0 -13 -10 -20 |
7 -8 |
0 | ||
|---|---|---|---|---|---|
| NOK MILLION | Q4 2021 | Q3 2021 | Q4 2020 | 2021 | 2020 |
| Total operating income | 71 | 61 | 68 | 228 | 204 |
| EBITDA | -19 | -2 | -12 | -11 | -29 |
| Operating income in other activities mainly consist of non-paper related operations defined as Green Energy which includes pellets and biogas. Other activities also include unallocated headquarter costs. The CASH FLOW NOK MILLION |
Q4 2021 | unallocated headquarter costs are estimated to be EBITDA negative by approximately NOK 35 million per annum but are not uniformly distributed throughout the quarters of the year. Q3 2021 |
Q4 2020 | 2021 | 2020 |
| EBITDA | 422 | 111 | 146 | 662 | 736 |
| Change in working capital | 54 | -22 | 33 | 57 | 393 |
| Restructuring payments | -53 | -129 | -27 | -220 | -69 |
| Gain and losses from divestments | 0 | -9 | -1 | -16 | -153 |
| Net financial items | -32 | -42 | -31 | -142 | -180 |
| Taxes paid | -32 | -43 | -20 | -106 | -102 |
| Other items | -42 | 34 | -27 | -44 | -76 |
| Net cash flow from operating activities | 317 | -99 | 73 | 191 | 549 |
| Purchases of property, plant and equipment and intangible assets | -326 | -347 | -244 | -1 021 | -632 |
| -whereof maintenance capex | -84 | -24 | -103 | -172 | -264 |
Net cash flow from operating activities was positive NOK 317 million in the quarter.
The operating cash flow was positively impacted by change in working capital of NOK 54 million, mainly due sale of CO2 allowances in the quarter combined with an increase in trade and other payables, partly offset by an increase in inventories and trade and other receivables.
The operating cash flow was negatively impacted by restructuring payments of NOK 53 million, mainly relating to employee redundancy payments at the Tasman mill in New Zealand.
Taxes paid in the fourth quarter relate to operations in Norske Skog Golbey and taxes for previous years related to the Italian sales office.
Maintenance capex of NOK 84 million relates to ordinary maintenance in the quarter, an increase from the third quarter. Remaining purchases of property, plant and equipment and intangible assets relate to investments in the waste-to-energy facility at the Norske Skog Bruck industrial site and the packaging paper projects at Norske Skog Bruck and Norske Skog Golbey.
| NOK MILLION | 31 DEC 2021 | 30 SEP 2021 | 31 DEC 2020 |
|---|---|---|---|
| Non-current assets | 4 538 | 4 154 | 4 084 |
| Cash and cash equivalents | 1 489 | 1 163 | 980 |
| Inventories, trade and other receivables and other current assets | 3 098 | 2 664 | 2 723 |
| Total assets | 9 125 | 7 982 | 7 787 |
| Equity | 3 133 | 2 767 | 3 219 |
| Non-current liabilities | 3 391 | 3 259 | 2 496 |
| Current liabilities | 2 600 | 1 956 | 2 073 |
| Net interest-bearing debt | 1 054 | 1 052 | 725 |
Total assets increased in the fourth quarter mainly due to an increase in cash and cash equivalents, property, plant and equipment and other current assets.
In total, cash and cash equivalents increased to NOK 1 489 million from NOK 1 163 million at previous quarter end. The increase is a result of sale of net surplus CO2 allowances, positive EBITDA in the quarter, investment in property, plant and equipment offset by new loans raised.
Non-current liabilities increased from previous quarter. Local debt to finance the waste-to-energy plant in Austria was drawn with approximately EUR 45 million as of quarter end, compared to EUR 37 million as of the previous quarter. Debt to finance the packaging paper projects at Norske Skog Bruck and Norske Skog Golbey was drawn with approximately EUR 19 million at quarter end, these were undrawn at previous quarter end.
Net interest-bearing debt increased from NOK 1 052 million to NOK 1 054 million in the quarter.
Energy and raw material markets remain highly volatile and uncertain into 2022. The unprecedented increases for the largest input factors, particularly energy, do not show signs of being alleviated any time soon. The continued high prices for energy, recovered paper and other input costs into 2022 have resulted in further necessary publication paper price increases for all grades in Europe.
The significant capacity closures and conversion to packaging paper in the industry have positively impacted the market balance for publication paper. Additional capacity closures have been announced for 2022 and 2023. Operating rates are expected to remain high for the industry well into 2022.
The waste-to-energy facility at Norske Skog Bruck is in the commissioning phase and is expected to reach full operations in the second quarter. Once fully operational, the facility will substantially
reduce gas consumption and thus CO2-emissions for the Norske Skog Bruck site.
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Norske Skog carries out preparatory groundwork for establishing packaging paper production at both Norske Skog Bruck and Norske Skog Golbey, and performs necessary commercial market preparations. Production of packaging paper is expected to start at Norske Skog Bruck in the fourth quarter of 2022, and at Norske Skog Golbey in the fourth quarter of 2023.
Norske Skog will develop business opportunities for CEBINA and CEBICO. This includes to evaluate a potential capacity increase for CEBICO beyond the existing 300 tonnes annual pilot-scale capacity. The pilot facility will enable production and delivery of larger test volumes.
SKØYEN, 3 FEBRUARY 2022 THE BOARD OF DIRECTORS OF NORSKE SKOG ASA
Chair Board member Board member CEO
John Chiang Arvid Grundekjøn Trine-Marie Hagen Sven Ombudstvedt
| NOK MILLION | NOTE | Q4 2021 | Q3 2021 | Q4 2020 | YTD 2021 | YTD 2020 |
|---|---|---|---|---|---|---|
| Operating revenue | 2 980 | 2 532 | 2 402 | 9 848 | 9 173 | |
| Other operating income | 113 | 110 | 74 | 466 | 439 | |
| Total operating income | 5 | 3 092 | 2 642 | 2 476 | 10 315 | 9 612 |
| Distribution costs | -291 | -307 | -312 | -1 187 | -1 159 | |
| Cost of materials | -1 800 | -1 615 | -1 351 | -6 055 | -5 093 | |
| Employee benefit expenses | -428 | -436 | -439 | -1 723 | -1 760 | |
| Other operating expenses | -152 | -173 | -228 | -687 | -865 | |
| Restructuring expenses | -12 | -17 | -47 | -192 | -75 | |
| Depreciation | 4 | -115 | -109 | -112 | -433 | -438 |
| Impairments | 4 | 22 | 0 | -258 | 22 | -451 |
| Derivatives and other fair value adjustments | 7 | 163 | -551 | -1 006 | -218 | -1 112 |
| Operating earnings | 479 | -565 | -1 276 | -160 | -1 339 | |
| Share of profit in associated companies | 10 | -5 | -4 | 6 | -18 | -10 |
| Financial items | 6 | 5 | -45 | 50 | -118 | -349 |
| Profit/loss before income taxes | 480 | -614 | -1 221 | -295 | -1 698 | |
| Income taxes | -80 | 12 | -142 | -68 | -186 | |
| Profit/loss for the period | 400 | -602 | -1 363 | -363 | -1 884 | |
| Basic earnings per share (NOK) | 4.24 | -6.38 | -14.46 | -3.85 | -19.99 | |
| Diluted earnings per share (NOK) | 4.24 | -6.38 | -14.46 | -3.85 | -19.99 |
| NOK MILLION | Q4 2021 | Q3 2021 | Q4 2020 | 2021 | 2020 |
|---|---|---|---|---|---|
| Profit/loss for the period | 400 | -602 | -1 363 | -363 | -1 884 |
| Items that may be reclassified subsequently to profit or loss | |||||
| Currency translation differences | -46 | 3 | -143 | -122 | 183 |
| Tax expense on translation differences | 0 | 0 | 0 | 0 | -4 |
| Reclassified translation differences upon divestment of foreign operations | 0 | 0 | 0 | 0 | -62 |
| Total | -46 | 3 | -143 | -122 | 117 |
| Items that will not be reclassified subsequently to profit or loss | |||||
| Remeasurements of post-employment benefit obligations | 14 | 0 | 11 | 14 | 11 |
| Tax effect on remeasurements of employment benefit obligations | -2 | 0 | -2 | -2 | -2 |
| Total | 12 | 0 | 9 | 12 | 9 |
| Other comprehensive income for the period | -33 | 3 | -134 | -110 | 126 |
| Total comprehensive income for the period | 367 | -598 | -1 497 | -473 | -1 758 |
| NOK MILLION | NOTE | 31 DEC 2021 | 30 SEP 2021 | 31 DEC 2020 |
|---|---|---|---|---|
| Intangible assets | 4 | 21 | 19 | 55 |
| Property, plant and equipment | 4 | 4 103 | 3 892 | 3 586 |
| Investments in associated companies | 10 | 108 | 113 | 43 |
| Other non-current assets | 7 | 305 | 131 | 401 |
| Total non-current assets | 4 538 | 4 154 | 4 084 | |
| Inventories | 1 203 | 1 134 | 1 194 | |
| Trade and other receivables | 1 411 | 1 317 | 1 288 | |
| Cash and cash equivalents | 1 489 | 1 163 | 980 | |
| Other current assets | 7 | 484 | 213 | 241 |
| Total current assets | 4 587 | 3 827 | 3 703 | |
| Total assets | 9 125 | 7 982 | 7 787 | |
| Paid-in equity | 8 | 8 898 | 8 898 | 8 510 |
| Retained earnings | -5 765 | -6 132 | -5 292 | |
| Total equity | 3 133 | 2 767 | 3 219 | |
| Pension obligations | 312 | 329 | 297 | |
| Deferred tax liability | 260 | 259 | 308 | |
| Interest-bearing non-current liabilities | 6 | 2 356 | 2 136 | 1 613 |
| Other non-current liabilities | 7 | 463 | 535 | 277 |
| Total non-current liabilities | 3 391 | 3 259 | 2 496 | |
| Interest-bearing current liabilities | 6 | 187 | 79 | 92 |
| Trade and other payables | 1 941 | 1 698 | 1 728 | |
| Tax payable | 50 | 14 | 54 | |
| Other current liabilities | 7 | 422 | 165 | 199 |
| Total current liabilities | 2 600 | 1 956 | 2 073 | |
| Total liabilities | 5 991 | 5 215 | 4 568 | |
| Total equity and liabilities | 9 125 | 7 982 | 7 787 |
SKØYEN, 3 FEBRUARY 2022 THE BOARD OF DIRECTORS OF NORSKE SKOG ASA
Chair Board member Board member CEO
John Chiang Arvid Grundekjøn Trine-Marie Hagen Sven Ombudstvedt
| NOK MILLION | Q4 2021 | Q3 2021 | Q4 2020 | 2021 | 2020 |
|---|---|---|---|---|---|
| Cash generated from operations | 2 886 | 2 494 | 2 254 | 10 003 | 9 617 |
| Cash used in operations | -2 505 | -2 508 | -2 130 | -9 564 | -8 786 |
| Cash flow from currency hedges and financial items | -10 | -12 | -5 | -39 | -77 |
| Interest payments received | 2 | 1 | 1 | 4 | 5 |
| Interest payments made | -23 | -31 | -26 | -107 | -109 |
| Taxes paid | -32 | -43 | -20 | -106 | -102 |
| Net cash flow from operating activities 1) | 317 | -99 | 73 | 191 | 549 |
| Purchases of property, plant and equipment and intangible assets | -326 | -347 | -244 | -1 021 | -632 |
| Sales of property, plant and equipment and intangible assets | 0 | 9 | 1 | 17 | 933 |
| Purchase of shares in companies and other financial payments | 0 | -25 | -2 | -95 | -79 |
| Sales of shares in companies and other financial instruments | 0 | 195 | 29 | 207 | 80 |
| Net cash flow from investing activities | -326 | -168 | -217 | -891 | 302 |
| New loans raised | 372 | 144 | 134 | 1 202 | 472 |
| Repayments of loans | -43 | -36 | -76 | -383 | -811 |
| Dividends paid | 0 | 0 | 0 | 0 | -516 |
| New equity | 0 | 0 | 0 | 388 | 0 |
| Net cash flow from financing activities | 329 | 109 | 58 | 1 207 | -855 |
| Foreign currency effects on cash and cash equivalents | 6 | -2 | -28 | 2 | 16 |
| Total change in cash and cash equivalents | 326 | -161 | -113 | 509 | 11 |
| Cash and cash equivalents at start of period | 1 163 | 1 324 | 1 093 | 980 | 970 |
| Cash and cash equivalents at end of period | 1 489 | 1 163 | 980 | 1 489 | 980 |
| 1) Reconciliation of net cash flow from operating activities | |||||
| Profit/loss before income taxes | 480 | -614 | -1 221 | -295 | -1 698 |
| Change in working capital | 54 | -22 | 33 | 57 | 393 |
| Change in restructuring provisions | -41 | -112 | 20 | -28 | 6 |
| Depreciation and impairments | 93 | 109 | 370 | 411 | 888 |
| Derivatives and other fair value adjustments | -165 | 589 | 987 | 223 | 1 055 |
| Gain and losses from divestment of business activities and PPE | 0 | -9 | -1 | -16 | -153 |
| Net financial items without cash effect | -33 | 7 | -87 | -7 | 179 |
| Taxes paid | -32 | -43 | -20 | -106 | -102 |
| Change in pension obligations and other employee benefits | 1 | -4 | -2 | -13 | -7 |
| Adjustment for other items | -41 | 0 | -7 | -37 | -12 |
| Net cash flow from operating activities | 317 | -99 | 73 | 191 | 549 |
| OTHER | ||||
|---|---|---|---|---|
| NOK MILLION | PAID-IN EQUITY |
PAID-IN EQUITY |
RETAINED | EARNINGS TOTAL EQUITY |
| Equity 1 January 2020 | 6 261 | 2 249 | -3 018 | 5 493 |
| Profit/loss for the period | 0 | 0 | -522 | -522 |
| Other comprehensive income for the period | 0 | 0 | 260 | 260 |
| Dividends paid | 0 | 0 | -516 | -516 |
| Equity 30 September 2020 | 6 261 | 2 249 | -3 795 | 4 715 |
| Profit/loss for the period | 0 | 0 | -1 363 | -1 363 |
| Other comprehensive income for the period | 0 | 0 | -134 | -134 |
| Equity 31 December 2020 | 6 261 | 2 249 | -5 292 | 3 219 |
| Increase share capital | 388 | 0 | 0 | 388 |
| Profit/loss for the period | 0 | 0 | -161 | -161 |
| Other comprehensive income for the period | 0 | 0 | -80 | -80 |
| Equity 30 June 2021 | 6 649 | 2 249 | -5 533 | 3 365 |
| Profit/loss for the period | 0 | 0 | -602 | -602 |
| Other comprehensive income for the period | 0 | 0 | 3 | 3 |
| Equity 30 September 2021 | 6 649 | 2 249 | -6 132 | 2 767 |
| Profit/loss for the period | 0 | 0 | 400 | 400 |
| Other comprehensive income for the period | 0 | 0 | -33 | -33 |
| Equity 31 December 2021 | 6 649 | 2 249 | -5 765 | 3 133 |
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Norske Skog ASA ("the company") and its subsidiaries ("the group" or "Norske Skog") produce, distribute and sell publication paper. This includes newsprint and magazine paper.
All amounts in the interim financial statements are presented in NOK million unless otherwise stated. Due to rounding, there may be differences in the summation of columns and rows.
The table below shows the applied average (un-weighted monthly) foreign exchange rates per quarter and the closing exchange rate at month ends for the most important currencies for the group.
| Q4 2021 | Q3 2021 | 31 DEC 2021 | 30 SEP 2021 | 31 DEC 2020 | |
|---|---|---|---|---|---|
| AUD | 6.36 | 6.44 | 6.40 | 6.32 | 6.59 |
| EUR | 9.97 | 10.33 | 9.99 | 10.17 | 10.47 |
| GBP | 11.76 | 12.08 | 11.89 | 11.81 | 11.65 |
| NZD | 6.06 | 6.14 | 6.03 | 6.03 | 6.16 |
| USD | 8.72 | 8.76 | 8.82 | 8.78 | 8.53 |
The interim financial statements of Norske Skog have been prepared in accordance with IAS 34 Interim Financial Reporting. The interim financial statements do not include all information required for full annual financial statements and should be read in conjunction with the consolidated financial statements for 2020. The interim financial statements are unaudited.
The accounting policies applied in the preparation of the interim financial statements are consistent with those applied in the preparation of the consolidated financial statements for the year ended
31 December 2020, except for the adaptation of amended standards and new interpretations, which are mandatory from 1 January 2021. These changes are described in the consolidated financial statements for 2020.
The group has not early adopted any standard, interpretation or amendment that has been issued but is not yet mandatory.
Preparation of interim financial statements in accordance with IFRS implies use of estimates, which are based on judgements and assumptions that affect the application of accounting principles and the reported amounts of assets, liabilities, revenues and expenses. Actual amounts might differ from such estimates.
Property, plant and equipment are tested for possible impairment charges whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. A prolonged decrease in prices or demand beyond the historical level could be an indicator of impairment and an impairment test will be prepared. The recoverable amount is the higher of an asset's fair value less sales costs or its value in use. Value in use is the present value of the future cash flows expected to be derived from a cash-generating unit. The key drivers of profitability in the industry and thus asset values for Norske Skog are product prices relative to production costs. Contracted prices/costs are reflected when applicable. Given that the actual impact of the Covid-19 situation on global economy and impact on future demand for publication paper is unclear there remains uncertainty and circumstances may require further impairment testing.
Norske Skog's portfolio of commodity contracts consist mainly of contracts that are settled through physical delivery. Embedded derivatives in commodity contracts are measured at fair value and embedded derivatives that are not traded in an active marked, are assessed through valuation techniques.
The fair value of embedded derivatives in physical contracts vary depending on changes in currency and price indexes.
Commodity contracts that fail to meet the own-use exemption criteria in IFRS 9 Financial instruments – recognition and measurement are recognised in the balance sheet and valued at fair value.
The group uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at each balance sheet date. See Note 9 in the consolidated financial statements for 2020 for more information regarding the calculation of fair value of derivatives.
Provisions for environmental restoration, dismantling costs, restructuring activities and legal claims are recognised when the group has a present legal or constructive obligation as a result of past events, an outflow of resources is more likely than not to be required to settle the obligation and the amount can be reliably estimated.
Provisions for future environmental and dismantling liabilities are based on a number of assumptions made using management's best judgment. See Note 2 in the consolidated financial statements for 2020
for a more thorough description of important accounting estimates and assumptions impacting the preparation of financial statements.
Norske Skog is an international company that, through its ongoing business operations, will be exposed to litigation and claims from public authorities and contracting parties as well as assessments from public authorities in each country it operates.
| JAN-DEC 2021 | PROPERTY, PLANT AND EQUIPMENT |
RIGHT-OF-USE ASSETS |
TOTAL PROPERTY PLANT AND EQUIPMENT |
INTANGIBLE ASSETS |
|---|---|---|---|---|
| Carrying value at start of period | 3 469 | 117 | 3 586 | 55 |
| Additions* | 1 019 | 29 | 1 048 | 34 |
| Depreciation | -387 | -38 | -425 | -8 |
| Disposals | 0 | 0 | 0 | -57 |
| Currency translation differences | -124 | -3 | -127 | -2 |
| Carrying value at end of period | 3 999 | 104 | 4 103 | 21 |
*The difference between additions and the line Purchases of property, plant and equipment and intangible assets in the condensed consolidated statement of cash flows is due to right-of-use assets allocated emission allowances, accruals for payments and other additions with no cash impact.
| 31 DEC 2021 | TOTAL PROPERTY PLANT AND EQUIPMENT |
INTANGIBLE ASSETS |
|---|---|---|
| Publication paper Europe | 3 768 | 6 |
| Publication paper Australasia | 259 | 1 |
| Other activities | 76 | 13 |
| Total | 4 103 | 21 |
The activities of the Norske Skog group are focused on two business segments, Europe and Australasia. The segment structure is in line with how the group is managed internally. Norske Skog's chief operating decision maker is corporate management, who distribute resources and assess performance of the group's operating segments. Norske Skog has an integrated strategy in Europe and Australasia to maximise the profit in each region. The optimisation is carried out through coordinated sales and operational planning. The regional planning, in combination with structured sales and operational processes, ensures maximisation of profit.
Publication paper includes newsprint and magazine paper. Newsprint includes standard newsprint and improved newsprint used in newspapers, inserts, catalogues etc. Magazine paper includes the paper qualities super calendared (SC) and lightweight coated (LWC). Magazine paper is used in magazines, catalogues and advertising materials.
Operating revenue consist mainly of sale of goods for both Publication Paper Europe and Publication Paper Australasia.
The publication paper Europe segment encompasses production and sale of newsprint and magazine paper in Europe. All the four European mills and the regional sales organization are included in the operating segment publication paper Europe.
The publication paper Australasia segment encompasses production and sale of newsprint and magazine paper in Australasia. Mills in Australasia and the regional sales organization are included in the operating segment publication paper Australasia. On 30 June 2021, the Norske Skog Tasman mill ceased production, thus the Norske Skog Boyer mill is the only remaining mill in the Australasian operating segment.
Activities in the group that do not fall into the operating segments are presented under other activities. This includes corporate functions and Green Energy business.
The pellets operation of Nature's Flame is included in Green Energy under other activities.
| PAPER EUROPE |
PAPER AUSTRALASIA |
OTHER ACTIVITIES |
ELIMINATIONS | NORSKE SKOG GROUP |
|---|---|---|---|---|
| 2 543 | 389 | 69 | -20 | 2 980 |
| 105 | 6 | 2 | -1 | 113 |
| 2 648 | 395 | 71 | -21 | 3 092 |
| -230 | -52 | -10 | 0 | -291 |
| -1 562 | -215 | -23 | 0 | -1 800 |
| -329 | -68 | -31 | 1 | -428 |
| -131 | -15 | -26 | 20 | -152 |
| 395 | 46 | -19 | 0 | 422 |
| -12 | -1 | 0 | 0 | -12 |
| -100 | -11 | -4 | 0 | -115 |
| 8 | 14 | 0 | 0 | 22 |
| 165 | -2 | 0 | 0 | 163 |
| 456 | 45 | -23 | 0 | 479 |
| 100 | 100 | 73 | 100 | |
| PUBLICATION | PUBLICATION |
| Q3 2021 | PUBLICATION PAPER EUROPE |
PUBLICATION PAPER AUSTRALASIA |
OTHER ACTIVITIES |
ELIMINATIONS | NORSKE SKOG GROUP |
|---|---|---|---|---|---|
| Operating revenue | 2 099 | 400 | 59 | -26 | 2 532 |
| Other operating income | 84 | 26 | 2 | -1 | 110 |
| Total operating income | 2 183 | 426 | 61 | -27 | 2 642 |
| Distribution costs | -252 | -50 | -6 | 0 | -307 |
| Cost of materials | -1 341 | -260 | -17 | 3 | -1 615 |
| Employee benefit expenses | -330 | -81 | -26 | 1 | -436 |
| Other operating expenses | -146 | -36 | -14 | 23 | -173 |
| EBITDA | 113 | 0 | -2 | 0 | 111 |
| Restructuring expenses | -4 | -13 | 0 | 0 | -17 |
| Depreciation | -96 | -10 | -4 | 0 | -109 |
| Derivatives and other fair value adjustments | -551 | 0 | 0 | 0 | -551 |
| Operating earnings | -537 | -22 | -5 | 0 | -565 |
| Share of operating revenue from external parties (%) | 100 | 100 | 63 | 100 |
| Q4 2020 | PUBLICATION PAPER EUROPE |
PUBLICATION PAPER AUSTRALASIA |
OTHER ACTIVITIES |
ELIMINATIONS | NORSKE SKOG GROUP |
|---|---|---|---|---|---|
| Operating revenue | 1 834 | 520 | 65 | -17 | 2 402 |
| Other operating income | 65 | 6 | 3 | 0 | 74 |
| Total operating income | 1 899 | 526 | 68 | -17 | 2 476 |
| Distribution costs | -229 | -74 | -9 | 0 | -312 |
| Cost of materials | -1 008 | -325 | -17 | 0 | -1 351 |
| Employee benefit expenses | -308 | -93 | -39 | 1 | -439 |
| Other operating expenses | -184 | -47 | -15 | 16 | -228 |
| EBITDA | 171 | -13 | -12 | 0 | 146 |
| Restructuring expenses | -47 | 1 | 0 | 0 | -47 |
| Depreciation | -96 | -13 | -3 | 0 | -112 |
| Impairments | -161 | -96 | 0 | 0 | -258 |
| Derivatives and other fair value adjustments | -1 129 | 123 | 0 | 0 | -1 006 |
| Operating earnings | -1 262 | 0 | -15 | 0 | -1 276 |
| Share of operating revenue from external parties (%) | 100 | 100 | 77 | 100 |
| 2021 | PUBLICATION PAPER EUROPE |
PUBLICATION PAPER AUSTRALASIA |
OTHER ACTIVITIES |
ELIMINATIONS | NORSKE SKOG GROUP |
|---|---|---|---|---|---|
| Operating revenue | 7 990 | 1 759 | 214 | -115 | 9 848 |
| Other operating income | 422 | 33 | 13 | -3 | 466 |
| Total operating income | 8 412 | 1 792 | 228 | -117 | 10 315 |
| Distribution costs | -937 | -226 | -24 | 0 | -1 187 |
| Cost of materials | -4 986 | -1 045 | -51 | 28 | -6 055 |
| Employee benefit expenses | -1 296 | -340 | -91 | 3 | -1 723 |
| Other operating expenses | -565 | -137 | -72 | 87 | -687 |
| EBITDA | 628 | 44 | -11 | 0 | 662 |
| Restructuring expenses | -16 | -174 | -3 | 0 | -192 |
| Depreciation | -380 | -40 | -13 | 0 | -433 |
| Impairments | 8 | 14 | 0 | 0 | 22 |
| Derivatives and other fair value adjustments | -148 | -69 | 0 | 0 | -218 |
| Operating earnings | 92 | -225 | -26 | 0 | -160 |
| Share of operating revenue from external parties (%) | 100 | 100 | 62 | 100 |
| PUBLICATION | PUBLICATION | ||||
|---|---|---|---|---|---|
| 2020 | PAPER EUROPE |
PAPER AUSTRALASIA |
OTHER ACTIVITIES |
ELIMINATIONS | NORSKE SKOG GROUP |
| Operating revenue | 7 153 | 1 932 | 199 | -110 | 9 173 |
| Other operating income | 259 | 175 | 5 | 0 | 439 |
| Total operating income | 7 412 | 2 106 | 204 | -110 | 9 612 |
| Distribution costs | -875 | -260 | -23 | 0 | -1 159 |
| Cost of materials | -3 870 | -1 191 | -45 | 13 | -5 093 |
| Employee benefit expenses | -1 327 | -342 | -94 | 3 | -1 760 |
| Other operating expenses | -681 | -208 | -70 | 93 | -865 |
| EBITDA | 659 | 106 | -29 | 0 | 736 |
| Restructuring expenses | -47 | -27 | -1 | 0 | -75 |
| Depreciation | -371 | -55 | -11 | 0 | -438 |
| Impairments | -283 | -167 | 0 | 0 | -451 |
| Derivatives and other fair value adjustments | -1 164 | 53 | 0 | 0 | -1 112 |
| Operating earnings | -1 207 | -91 | -42 | 0 | -1 339 |
| Share of operating revenue from external parties (%) | 100 | 100 | 56 | 100 |
| INCOME STATEMENT | Q4 2021 | Q3 2021 | Q4 2020 | 2021 | 2020 |
|---|---|---|---|---|---|
| OTHER OPERATING REVENUE | |||||
| Corporate functions | 21 | 24 | 17 | 95 | 91 |
| Green energy and other | 50 | 37 | 50 | 132 | 112 |
| Total | 71 | 61 | 68 | 228 | 204 |
| EBITDA | |||||
| Corporate functions | -28 | -12 | -26 | -37 | -54 |
| Green energy and other | 9 | 10 | 14 | 27 | 25 |
| Total | -19 | -2 | -12 | -11 | -29 |
| NOK MILLION | Q4 2021 | Q3 2021 | Q4 2020 | 2021 | 2020 |
|---|---|---|---|---|---|
| Net interest expenses | -23 | -31 | -28 | -113 | -113 |
| Currency gains/losses* | 41 | -6 | 98 | 78 | -185 |
| Other financial items | -12 | -8 | -20 | -82 | -50 |
| Total financial items | 5 | -45 | 50 | -118 | -349 |
*Currency gains and losses on accounts receivable and accounts payable are reported as Operating revenue and Cost of materials respectively.
On 12 October Norske Skog announced that it had entered into debt facility agreements with an aggregate amount of EUR 265 million to finance its EUR 350 million investment in recycled containerboard conversion projects.
The total financing amount represents approximately 75% of the investment amount, of which EUR 193 million is for the containerboard project at Norske Skog Golbey and EUR 72 million for the containerboard project at Norske Skog Bruck. The borrowing entities are Norske Skog Bruck GmbH and Norske Skog Golbey SAS, and the facilities are fully guaranteed by Norske Skog ASA.
The facilities will be drawn as capital expenditures are incurred, and repayment is scheduled to commence approximately upon completion of each respective project with average maturity towards the end of 2030. Utilisations are subject to customary conditions precedent for such facilities. As of 31 December 2021, the credit facilities had been drawn by approximately EUR 19 million.
In the first quarter of 2021 Norske Skog issued a EUR 150 million senior secured bond. The bond matures in March 2026 and has an interest rate of EURIBOR (zero floor) +5.5% with quarterly interest payments. The proceeds were mainly used to refinance existing debt and for general corporate purposes.
In connection with the refinancing in first quarter, Norske Skog repaid the outstanding amount of EUR 20 million on the EUR 31 million Revolving Credit Facility and entered into a new EUR 31 million Revolving Credit Facility agreements with revised terms and a tenor of five years.
The loan facility of EUR 54 million for the waste to energy plant is utilised incrementally as expenditures incur during the construction phase, after which it will be repaid in quarterly installments up until the final maturity date in 2028. The borrower under the facility is Norske Skog Bruck GmbH and Norske Skog ASA has provided a guarantee of EUR 20 million. As of 31 December 2021, the loan has been drawn by approximately EUR 45 million.
The remaining financing arrangements for the group includes leasing, factoring, and other credit facilities on mill level.
The financing covenants applicable to Norske Skog on a consolidated basis are (i) freely available and unrestricted cash and cash equivalents of minimum NOK 100 million, (ii) EBITDA* to net interest costs of minimum 2.0:1, and (iii) book equity to total assets of minimum 25% and (iv) minimum LTM EBITDA* of NOK 300 million at 31 December 2021, and NOK 400 million thereafter. In addition, there are various company specific financial covenants applicable to the subsidiaries acting as borrowers under the respective credit facilities.
*The EBITDA used in the financial covenants' calculations may differ from the EBITDA shown in the financial reporting due to adjustment requirements in the financing agreements.
| NOK MILLION | MATURITY | CURRENCY | INTEREST RATE |
NOMINAL VALUE |
AMOUNT OUTSTANDING 31 DEC 2021 |
|---|---|---|---|---|---|
| NSKOG02 | March 2026 | EUR | EURIBOR +5.50% |
150 | 150 |
| NOK MILLION | 2021 | 2022 | 2023 | 2024 | 2025- |
|---|---|---|---|---|---|
| Bonds | 0 | 0 | 0 | 0 | 1 498 |
| Debt to credit institutions** | 300 | 143 | 134 | 133 | 248 |
| Total | 300 | 143 | 134 | 133 | 1 746 |
*Not including items relating to IFRS 16.
**Includes full scheduled repayments for the EUR 54 million facility
Total debt listed in the repayment schedule differ from the carrying value in the balance sheet. This is due to the amortized cost principle.
Financed amounts from securitisation arrangements is classified as interest-bearing current liabilities. This amounts to NOK 83 million in debt repayment in the first quarter of 2022. The financed amount represents a group of individual loans, which are settled individually at maturity of the accounts receivable.
New loans are initiated on a consecutive basis based on new accounts receivable included under the securitization agreement. The liability is in its nature current and Norske Skog does not have an unconditional right to defer settlement beyond twelve months. The liabilities are liabilities that are settled through its normal operating cycle. The corresponding accounts receivable is derecognised when the customer pays it.
18
19
| ASSETS | LIABILITIES | |||
|---|---|---|---|---|
| 31 DEC 2021 | CURRENT NON-CURRENT | CURRENT NON-CURRENT | ||
| Energy contracts and embedded derivatives in energy contracts (level 3) | 308 | 176 | 215 | 270 |
| Other derivatives and financial instruments carried at fair value (level 2) | 0 | 0 | 1 | 0 |
| Total | 308 | 176 | 216 | 270 |
Norske Skog's portfolio of commodity contracts consists mainly of physical energy contracts. Certain of the energy contracts are measured at fair value. The fair value of commodity contracts is especially sensitive to future changes in energy prices.
The contract prices for energy in Norway are sensitive to change in paper and pulpwood prices. Externally forecasted price increases for paper increases the cost of energy. Although market prices for energy have increased in the short and the long end of the price curve compared to previous quarter, a higher contract price has a negative impact on the fair value of the contracts in the quarter.
Changes in the value of energy-/commodity contracts and embedded derivatives in contracts are presented in the income statement line Derivatives and other fair value adjustments. A sensitivity analysis of
the impact on profit after tax of fluctuations in energy prices, currency and price indices is given in Note 8 in the consolidated financial statements for 2020.
Financial derivative contracts are accounted for at fair value and changes in contracts are presented in the income statement under financial items. A sensitivity analysis of the impact on profit after tax of fluctuations in currency is given in Note 8 in the consolidated financial statements for 2020.
The valuation techniques used are described in Note 9 in the consolidated financial statement for 2020.
| NUMBER OF SHARES | OWNERSHIP % | |
|---|---|---|
| NS NORWAY HOLDING AS | 26 896 681 | 28.53 |
| The Bank of New York Mellon SA/NV | 4 619 935 | 4.90 |
| UBS Europe SE | 3 121 000 | 3.31 |
| The Bank of New York Mellon SA/NV | 2 999 682 | 3.18 |
| J.P. MORGAN BANK LUXEMBOURG S.A. | 2 317 049 | 2.46 |
| VERDIPAPIRFONDET FIRST GENERATOR | 1 979 828 | 2.10 |
| VERDIPAPIRFONDET HOLBERG NORGE | 1 700 000 | 1.80 |
| CLEARSTREAM BANKING S.A. | 1 518 664 | 1.61 |
| RBC Investor services bank S.A. | 1 500 000 | 1.59 |
| INTERTRADE SHIPPING AS | 1 400 000 | 1.49 |
| VERDIPAPIRFONDET EIKA SPAR | 1 358 006 | 1.44 |
| MP PENSJON PK | 1 198 015 | 1.27 |
| VERDIPAPIRFONDET DNB SMB | 1 168 191 | 1.24 |
| CARUCEL FINANCE AS | 1 149 624 | 1.22 |
| VERDIPAPIRFONDET EIKA NORGE | 1 010 566 | 1.07 |
| Skandinaviska Enskilda Banken AB | 1 000 000 | 1.06 |
| VERDIPAPIRFONDET FONDSFINANS NORGE | 880 000 | 0.93 |
| VERDIPAPIRFONDET NORDEA NORGE VERD | 854 513 | 0.91 |
| The Bank of New York Mellon SA/NV | 715 048 | 0.76 |
| PERSHING NOMINEES LIMITED | 712 145 | 0.76 |
| Other shareholders | 36 165 758 | 38.37 |
| Total | 94 264 705 | 100.00 |
The data is extracted from VPS 2 February 2022. Whilst every reasonable effort is made to verify all data, VPS cannot guarantee the accuracy of the analysis.
| 31 DEC 2021 | 30 SEP 2021 | 31 DEC 2020 | |
|---|---|---|---|
| Share price (NOK) | 38.40 | 37.10 | 38.70 |
| Book value of equity per share (NOK) | 33.24 | 29.35 | 39.01 |
In January 2021, Norske Skog ASA completed a private placement with a total transaction size of NOK 400 million. The private placement consisted of 11 764 705 new shares offered at a price of NOK 34 per share. The net proceeds from the issuance of the new shares will be used to finance the company's green growth projects.
On 5 February 2021 an extraordinary general meeting was held in Norske Skog ASA and resolved to issue 11 764 705 new shares. After the issuance Norske Skog ASA has 94 264 705 shares outstanding.
Investment in associated companies are accounted for in accordance with the equity method. The carrying value of associated companies are NOK 108 million at 31 December 2021.
At 31 December 2021 Norske Skog holds a 26% share of Circa Group AS, with a carrying value of NOK 94 million. Loss is included in the quarter with NOK 4 million. Circa Group AS is listed on Euronext Growth.
Due to later reporting dates than Norske Skog, the share of results from Circa Group is included with a three months lag.
Oceanwood is a related party to Norske Skog through the ownership in NS Norway Holding AS (largest shareholder).
There have not been any transactions with related parties in 2021.
On 1 February 2022 Norske Skog announced that it had entered into agreement to sell Nature's Flame pellets production company to Talley's Group for a consideration of approximately NZD 47.8 million. The transaction is expected to close during the first quarter of 2022, and result in a cash payment of approximately NZD 47.8 million and a book value gain of approximately NOK 150-200 million.
There have been no other events after the balance sheet date with significant impact on the interim financial statements for the fourth quarter of 2021.
| INCOME STATEMENT | Q4 2021 | Q3 2021 | Q2 2021 | Q1 2021 | Q4 2020 |
|---|---|---|---|---|---|
| Total operating income | 3 092 | 2 642 | 2 346 | 2 234 | 2 476 |
| Variable costs | -2 091 | -1 923 | -1 697 | -1 532 | -1 663 |
| Fixed costs | -580 | -608 | -631 | -591 | -668 |
| EBITDA | 422 | 111 | 17 | 112 | 146 |
| Restructuring expenses | -12 | -17 | -160 | -3 | -47 |
| Depreciation | -115 | -109 | -105 | -104 | -112 |
| Impairments | 22 | 0 | 0 | 0 | -258 |
| Derivatives and other fair value adjustment | 163 | -551 | -29 | 199 | -1 006 |
| Operating earnings | 479 | -565 | -277 | 204 | -1 276 |
| Share of profit in associated companies | -5 | -4 | -9 | 0 | 6 |
| Financial items | 5 | -45 | -79 | 1 | 50 |
| Profit/loss before income taxes | 480 | -614 | -365 | 205 | -1 221 |
| Income taxes | -80 | 12 | 10 | -11 | -142 |
| Profit/loss for the period | 400 | -602 | -355 | 194 | -1 363 |
| SEGMENT INFORMATION | Q4 2021 | Q3 2021 | Q2 2021 | Q1 2021 | Q4 2020 |
|---|---|---|---|---|---|
| Publication paper Europe | |||||
| Total operating income | 2 648 | 2 183 | 1 872 | 1 711 | 1 899 |
| EBITDA | 395 | 113 | 14 | 106 | 171 |
| Deliveries (1 000 tonnes) | 427 | 433 | 403 | 382 | 403 |
| Publication paper Australasia | |||||
| Total operating income | 395 | 426 | 482 | 489 | 526 |
| EBITDA | 46 | 0 | 7 | -8 | -13 |
| Deliveries (1 000 tonnes) | 62 | 68 | 87 | 90 | 97 |
| Other activities | |||||
| Total operating income | 71 | 61 | 36 | 60 | 68 |
| EBITDA | -19 | -2 | -4 | 14 | -12 |
| BALANCE SHEET | 31 DEC 2021 | 30 SEP 2021 | 30 JUN 2021 | 31 MAR 2021 | 31 DEC 2020 |
|---|---|---|---|---|---|
| Total non-current assets | 4 538 | 4 154 | 4 017 | 4 319 | 4 084 |
| Inventories | 1 203 | 1 134 | 1 172 | 1 184 | 1 194 |
| Trade and other receivables | 1 411 | 1 317 | 1 180 | 954 | 1 288 |
| Cash and cash equivalents | 1 489 | 1 163 | 1 324 | 1 622 | 980 |
| Other current assets | 484 | 213 | 503 | 482 | 241 |
| Total current assets | 4 587 | 3 827 | 4 178 | 4 243 | 3 703 |
| Total assets | 9 125 | 7 982 | 8 196 | 8 562 | 7 787 |
| Total equity | 3 133 | 2 767 | 3 365 | 3 677 | 3 219 |
| Total non-current liabilities | 3 391 | 3 259 | 2 846 | 2 834 | 2 496 |
| Trade and other payables | 1 941 | 1 698 | 1 633 | 1 528 | 1 728 |
| Other current liabilities | 659 | 258 | 351 | 523 | 345 |
| Total current liabilities | 2 600 | 1 956 | 1 985 | 2 051 | 2 073 |
| Total liabilities | 5 991 | 5 215 | 4 831 | 4 884 | 4 568 |
| Total equity and liabilities | 9 125 | 7 982 | 8 196 | 8 562 | 7 787 |
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|---|---|---|
| CASH FLOW | Q4 2021 | Q3 2021 | Q2 2021 | Q1 2021 | Q4 2020 |
|---|---|---|---|---|---|
| Reconciliation of net cash flow from operating activities | |||||
| EBITDA | 422 | 111 | 17 | 112 | 146 |
| Change in working capital | 54 | -22 | -115 | 141 | 33 |
| Payments made relating to restructuring activities | -53 | -129 | -19 | -19 | -27 |
| Gain and losses from divestment | 0 | -9 | 0 | -7 | -1 |
| Cash flow from net financial items | -32 | -42 | -36 | -32 | -31 |
| Taxes paid | -32 | -43 | -18 | -13 | -20 |
| Other | -42 | 34 | -19 | -18 | -27 |
| Net cash flow from operating activities | 317 | -99 | -190 | 163 | 73 |
| Purchases of property, plant and equipment and intangible assets | -326 | -347 | -159 | -189 | -244 |
| Net divestments | 0 | 179 | 0 | -49 | 27 |
| Net cash flow from investing activities | -326 | -168 | -159 | -238 | -217 |
| Net cash flow from financing activities | 329 | 109 | 47 | 723 | 58 |
| Foreign currency effects on cash and cash equivalents | 6 | -2 | 4 | -6 | -28 |
| Total change in cash and cash equivalents | 326 | -161 | -298 | 642 | -113 |
The European Securities and Markets Authority's (ESMA) has defined new guidelines for alternative performance measures (APM). An APM is defined as a financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure defined or specific in the applicable financial reporting framework (IFRS). The company uses EBITDA, EBITDA margin and return on capital employed (annualized) to measure operating performance on Group level. It is the company's view that the APMs provides the investors relevant and specific operating figures which may enhance their understanding of the performance.
EBITDA, EBITDA margin, variable costs, fixed costs, return on capital employed and net interest-bearing debt are defined by the company below.
EBITDA: Operating earnings for the period, before restructuring expenses, depreciation and amortization and impairment charges, derivatives and other fair value adjustments, determined on an entity, combined or consolidated basis. EBITDA is used for providing consisting information of operating performance and cash generating which is relative to other companies and frequently used by other stakeholders.
| NOK MILLION | Q4 2021 | Q3 2021 | Q4 2020 | 2021 | 2020 |
|---|---|---|---|---|---|
| Operating earnings | 479 | -565 | -1 276 | -160 | -1 339 |
| Restructuring expenses | 12 | 17 | 47 | 192 | 75 |
| Depreciation | 115 | 109 | 112 | 433 | 438 |
| Impairments | -22 | 0 | 258 | -22 | 451 |
| Derivatives and other fair value adjustments | -163 | 551 | 1 006 | 218 | 1 112 |
| EBITDA | 422 | 111 | 146 | 662 | 736 |
EBITDA margin: EBITDA / total operating income. EBITDA margin assist in providing a more comprehensive analysis of operating performance relative to other companies.
| NOK MILLION | Q4 2021 | Q3 2021 | Q4 2020 | 2021 | 2020 |
|---|---|---|---|---|---|
| EBITDA | 422 | 111 | 146 | 662 | 736 |
| Total operating income | 3 092 | 2 642 | 2 476 | 10 315 | 9 612 |
| EBITDA margin | 13.6 % | 4.2 % | 5.9 % | 6.4 % | 7.7 % |
| NOK MILLION | Q4 2021 | Q3 2021 | Q4 2020 | 2021 | 2020 |
|---|---|---|---|---|---|
| Distribution costs | 291 | 307 | 312 | 1 187 | 1 159 |
| Cost of materials | 1 800 | 1 615 | 1 351 | 6 055 | 5 093 |
| Variable costs | 2 091 | 1 923 | 1 663 | 7 242 | 6 252 |
Fixed costs: Employee benefit expenses + other operating expenses.
| NOK MILLION | Q4 2021 | Q3 2021 | Q4 2020 | 2021 | 2020 |
|---|---|---|---|---|---|
| Employee benefit expenses | 428 | 436 | 439 | 1 723 | 1 760 |
| Other operating expenses | 152 | 173 | 228 | 687 | 865 |
| Fixed costs | 580 | 608 | 668 | 2 410 | 2 625 |
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Return on capital employed (annualised): (Annualised EBITDA – Annualised Capital expenditure) / Capital employed (average). Return on capital employed assist in providing a more comprehensive analysis of returns relative to other companies.
| NOK MILLION | Q4 2021 | Q3 2021 | Q4 2020 | 2021 | 2020 |
|---|---|---|---|---|---|
| EBITDA | 422 | 111 | 146 | 662 | 736 |
| Capital expenditure | 326 | 347 | 244 | 1 021 | 632 |
| Average capital employed | 4 730 | 4 527 | 4 562 | 4 596 | 5 032 |
| Return on capital employed (annualised) | 8.1 % | -20.8 % | -8.6 % | -7.8 % | 2.1 % |
| NOK MILLION | 31 DEC 2021 | 30 SEP 2021 | 31 DEC 2020 |
|---|---|---|---|
| Intangible assets | 21 | 19 | 55 |
| Tangible assets | 4 103 | 3 892 | 3 586 |
| Inventory | 1 203 | 1 134 | 1 194 |
| Trade and other receivables | 1 411 | 1 317 | 1 288 |
| Trade and other payables | -1 941 | -1 698 | -1 728 |
| Capital employed | 4 797 | 4 663 | 4 395 |
Net interest-bearing debt: Net interest-bearing debt consist of bond issued and other interest-bearing liabilities (current and non-current) reduced by cash and cash equivalent.
| NOK MILLION | 31 DEC 2021 | 30 SEP 2021 | 31 DEC 2020 |
|---|---|---|---|
| Interest-bearing non-current liabilities | 2 356 | 2 136 | 1 613 |
| Interest-bearing current liabilities | 187 | 79 | 92 |
| Cash and cash equivalents | -1 489 | -1 163 | -980 |
| Net interest-bearing debt | 1 054 | 1 052 | 725 |
Capital expenditure (Capex): Purchases of property, plant and equipment and intangible assets.
Maintenance capex: Capex required to maintain the Group's current business in accordance with GAAP according to the latest annual financial statements (but excluding any capex for the development of new business).
Q4 2021 presentation
04 February 2022
Visit our website www.norskeskog.com
Quarterly reports and presentations in the Quartr app
2
1) Norske Skog is the largest shareholder with ~26% ownership position in Circa; 2) Installed capacity for biofuel and waste from recycled paper of 230 MW. Energy mainly used internally in the publication paper production process
3 1) Cash earnings defined as cash flow from operations less maintenance capex
5 1) Includes waste-to-energy project at the Bruck industrial site and packaging paper projects at the Bruck and Golbey industrial sites; 2) Cash earnings defined as cash flow from operations less maintenance capex
Remaining strategic project1 capex of EUR ~335m
| Segment financials | |||||
|---|---|---|---|---|---|
| NOKm | Q4 2021 | Q3 2021 | Q4 2020 | 2021 | 2020 |
| Europe | |||||
| Total operating income | 2,648 | 2,183 | 1,899 | 8,412 | 7,412 |
| EBITDA | 395 | 113 | 171 | 628 | 659 |
| EBITDA margin | 14.9% | 5.2% | 9.0% | 7.5% | 8.9% |
| Production (1 000 tonnes) | 428 | 428 | 382 | 1,628 | 1,468 |
| Deliveries (1 000 tonnes) | 427 | 433 | 403 | 1,645 | 1,482 |
| Production / capacity | 96% | 96% | 80% | 91% | 77% |
| Australasia | |||||
| Total operating income | 395 | 426 | 526 | 1,792 | 2,106 |
| EBITDA | 46 | 0 | -13 | 44 | 106 |
| EBITDA margin | 11.6% | 0.0% | -2.5% | 2.5% | 5.0% |
| Production (1 000 tonnes) | 62 | 62 | 94 | 292 | 332 |
| Deliveries (1 000 tonnes) | 62 | 68 | 97 | 308 | 343 |
| Production / capacity | 87% | 87% | 87% | 79% | 76% |
| Other activities | |||||
| Total operating income | 71 | 61 | 68 | 228 | 204 |
| EBITDA | -19 | -2 | -12 | -11 | -29 |
10 1) Based on historical and normalised prices; 2) RDF = Refuse Derived Fuel, is a fuel produced from various types of waste such as municipal solid waste (MSW), industrial waste or commercial waste
Site preparations and equipment orders underway
Project investment of EUR 350m (large share on contract)
ECA1-backed debt financing enables highly competitive interest rates
Stepwise introduction with Bruck in Q4 2022 and Golbey in Q4 2023
Recycled containerboard production capacity
Based on historical trend prices and full utilisation in 2025-26
11 Sources: RISI 1) ECA = Export Credit Agency
12 Sources: RISI
Capital and Véolia. Norske Skog to hold 10% of the equity in the development company, Green Valley Energie
15
▪ Significantly de-risked financing for ReSolute with France Relance grant of EUR 8.2m
Skog Saugbrugs mill in March 2020 have come on stream in 2021 to further improve the energy efficiency of Norske Skog. The projects are supported by the NOx Fund and Enova; 5) Being developed in partnership with Pearl Infrastructure
Norske Skog ASA Postal address: P.O. Box 294 Skøyen, 0213 Oslo, Norway Visitors: Sjølyst Plass 2, 0278 Oslo, Norway
Phone: +47 22 51 20 20 Email: [email protected] Email: [email protected]
17
This presentation contains statements regarding the future in connection with Norske Skog's growth initiatives, profit figures, outlook, strategies and objectives. All statements regarding the future are subject to inherent risks and uncertainties, and many factors can lead to actual profits and developments deviating substantially from what has been expressed or implied in such statements.
Norske Skog's EBITDA in the fourth quarter of 2021 was NOK 422 million, an increase from NOK 111 million in the third quarter of 2021. Sales prices for all grades increased in the quarter as a necessary consequence of unprecedented high energy costs in Europe and a tightened publication paper market situation following significant capacity closures and post Covid-19 demand recovery. The European mills operated at full capacity during the quarter.
"The substantial price increases in the European markets during the fourth quarter were a direct consequence of the unprecedented volatility and price level in the European energy market, and was necessary following several quarters of low or negative cash flows. Following significant capacity closures in the industry over the past 18 months, the demand for publication paper now exceeds available capacity," says Sven Ombudstvedt, CEO of Norske Skog.
Cash flow from operations was NOK 317 million in the quarter compared to NOK -99 million in the previous quarter, positively impacted by the improved operating margins, change in working capital and sale of CO2-allowances, but negatively impacted by employee redundancy payments at the Tasman mill in New Zealand. Operating earnings in the fourth quarter of 2021 were NOK 479 million compared to operating earnings in the third quarter of 2021 of NOK -565 million.
Net profit in the quarter was NOK 400 million compared to a net loss of NOK 602 million in the previous quarter. Net interest-bearing debt was NOK 1 054 million at the end of the fourth quarter, with an equity ratio of 34%.
Following the end of the quarter, Norske Skog entered into an agreement with Talley's Group, a New Zealand-based food company, to sell the Nature's Flame pellets company for a consideration of NZD 47.8 million, which is approximately NOK 280 million. The transaction is expected to close during the first quarter of 2022.
The final investment decisions to convert one newsprint machine both at Golbey and Bruck will add 760 000 tonnes of cost-competitive and low-emission containerboard capacity. The containerboard production will be fully based on recycled fibre, and will utilise green energy generated from the construction of a new waste-to-energy facility at the Bruck industrial site and a new biomass plant at the Golbey industrial site. In the fourth quarter, Norske Skog entered into attractive debt facility agreements, having an average maturity towards the end of 2030, with an aggregate amount of EUR 265 million to finance the EUR 350 million investment into the recycled containerboard projects. The commercial terms support the highly competitive profile of the containerboard projects.
"Despite increasing cost level in Europe, our packaging and energy projects progress on time and budget. The wasteto-energy facility at Bruck is in the commissioning phase, and we will have formal takeover from Valmet during the second quarter. We are proud of being able to both serve the publication paper and the packaging paper markets in a sustainable and profitable manner within year-end," says Ombudstvedt.
Norske Skog actively works to realise value from its industrial sites by developing existing infrastructure and industry competence. The continued development of CEBICO (bio composites) also progressed well in the quarter. The installation of a NOK 25 million extruder, enabling a significant increase in the ability and quality of testing with potential customers, was completed in the fourth quarter of 2021.
Sjølyst plass 2 P.O. Box 294 Skøyen, 0213 Oslo Norway www.norskeskog.com twitter: @Norske_Skog Through the partnerships with Ocean GeoLoop at Norske Skog Skogn and Borg CO2 at Norske Skog Saugbrugs, Norske Skog aims to pursue the opportunity to become CO2 net negative, and to explore economically viable models for utilisation of biogenic CO2.
In addition, Norske Skog aims to eliminate the use of fossil-based means of transportation by 2050. Annually, Norske Skog uses around 2-2.5 million tonnes of recovered paper, wood and wood chips at the European mills.
| NOK million (unless otherwise stated) | Q4 2021 | Q3 2021 | Q4 2020 | 2021 | 2020 |
|---|---|---|---|---|---|
| Income statement | |||||
| Total operating income | 3 092 | 2 642 | 2 476 | 10 315 | 9 612 |
| EBITDA | 422 | 111 | 146 | 662 | 736 |
| Operating earnings | 479 | -565 | -1 276 | -160 | -1 339 |
| Profit/loss for the period | 400 | -602 | -1 363 | -363 | -1 884 |
| Cash flow | |||||
| Net cash flow from operating activities | 317 | -99 | 73 | 191 | 549 |
| Net cash flow from investing activities | -326 | -168 | -217 | -891 | 302 |
| Operating margin and profitabilty (%) | |||||
| EBITDA margin | 13.6 | 4.2 | 5.9 | 6.4 | 7.7 |
| Return on capital employed (annualised) | 8.1 | -20.8 | -8.6 | -7.8 | 2.1 |
| Capacity utilisation (Production / capacity %) | 95 | 95 | 81 | 89 | 77 |
Total annual publication paper production capacity for the group is 2.1 million tonnes, with 1.8 million tonnes in Europe and 0.3 million tonnes in Australasia. Norske Skog has numerous ongoing fibre and energy activities at all industrial sites.
Operating revenue increased from the previous quarter due to higher sales prices. The prices increased in the quarter due to higher energy and other raw material costs. Variable cost per tonne increased in the quarter due to significantly higher energy prices. Fixed costs per tonne were in line with previous quarter. According to Eurograph, demand for standard newsprint in Europe decreased by 4% through November compared to the same period in 2020. SC magazine demand decreased by around 1%; whereas, LWC paper demand increased by around 1% through November compared to the same period last year. Capacity utilisation was unchanged from previous quarter at 96%.
Operating income decreased slightly compared to previous quarter due to lower delivery volumes but was somewhat offset by a slight price increase. Variable costs per tonne were lower compared to the previous quarter because of a slight reduction in energy and raw materials costs. Employee benefit expenses were lower, also on a per tonne basis, mainly due to the cessation of paper production at Tasman. According to official trade statistics, demand for newsprint in the fourth quarter in Australasia increased by 1% compared to the same period in 2020. Capacity utilisation was in line with the previous quarter at 87%.
Energy and raw material markets remain highly volatile and uncertain into 2022. The unprecedented increases for the largest input factors, particularly energy, do not show signs of being alleviated any time soon. The continued high prices for energy, recovered paper and other input costs into 2022 have resulted in further necessary publication paper price increases for all grades in Europe.
The significant capacity closures and conversion to packaging paper in the industry have positively impacted the market balance for publication paper. Additional capacity closures have been announced for 2022 and 2023. Operating rates are expected to remain high for the industry well into 2022.
The waste-to-energy facility at Norske Skog Bruck is in the commissioning phase and is expected to reach full operations in the second quarter. Once fully operational, the facility will substantially reduce gas consumption and thus CO2-emissions for the Norske Skog Bruck site.
Norske Skog carries out preparatory groundwork for establishing packaging paper production at both Norske Skog Bruck and Norske Skog Golbey, and performs necessary commercial market preparations. Production of packaging paper is expected to start at Norske Skog Bruck in the fourth quarter of 2022, and at Norske Skog Golbey in the fourth quarter of 2023.
Norske Skog will develop business opportunities for CEBINA and CEBICO. This includes to evaluate a potential capacity increase for CEBICO beyond the existing 300 tonnes annual pilot-scale capacity. The pilot facility will enable production and delivery of larger test volumes.
Norske Skog is a world leading producer of publication paper with strong market positions and customer relations in Europe and Australasia. The Norske Skog Group operates four mills in Europe, two of which will produce recycled containerboard following ongoing conversion projects. In addition, the Group operates one paper mill in Australia. Norske Skog aims to further diversify its operations and continue its transformation into a growing and high-margin business through a range of promising energy and fibre development projects. The Group has approximately 2 150 employees , is headquartered in Norway and listed on the Oslo Stock Exchange under the ticker NSKOG.
The company will not hold a live presentation, but will arrange a webinar today at 08:30 CEST for pre-registered participants. The presentation, the quarterly financial statements and the press releases are available on www.norskeskog.com and published on www.newsweb.no under the ticker NSKOG. If you want to receive future Norske Skog press releases, please subscribe through the website of the Oslo Stock Exchange www.newsweb.no.
Norske Skog Communications and Public Affairs
For further information: Norske Skog media: Vice President Communication and Public Affairs Carsten Dybevig Email: [email protected] Mob: +47 917 63 117
Norske Skog financial markets: Investor Relation Manager Even Lund Email: [email protected] Mob: +47 906 12 919
Norske Skogs EBITDA i fjerde kvartal 2021 var NOK 422 millioner, en oppgang fra NOK 111 millioner i tredje kvartal 2021. Salgsprisen økte for alle papirkvaliteter i kvartalet, som en nødvendig konsekvens av rekordhøye energikostnader i Europa og et sterkt publikasjonspapirmarked, som følge av betydelige kapasitetsstengninger og bedre etterspørsel etter Covid-19 perioden. De europeiske fabrikkene hadde full kapasitetsutnyttelse i kvartalet.
- De betydelige prisstigningene i de europeiske markedene i løpet av fjerde kvartal var en direkte konsekvens av en eksepsjonell situasjon med volatile og høye priser på energi, og var helt nødvendig som følge av flere kvartaler med lav eller negativ kontantstrøm. Etter betydelige kapasitetsstenginger i industrien de siste 18 månedene, overstiger etterspørselen etter publikasjonspapir nå tilgjengelig kapasitet, sier Sven Ombudstvedt, konsernsjef i Norske Skog.
Kontantstrøm fra driften var NOK 317 millioner i kvartalet sammenlignet med NOK -99 millioner kroner i forrige kvartal. Kontantstrømmen var positivt påvirket av forbedrede driftsmarginer, endring i arbeidskapitalen og salg av CO2-kvoter, men negativt påvirket av sluttvederlagsutbetalinger i kvartalet ved Tasman-fabrikken i New Zealand. Driftsresultatet i fjerde kvartal 2021 var på NOK 479 millioner sammenlignet med et driftsresultat på NOK -565 millioner i tredje kvartal 2021.
Overskuddet i kvartalet var NOK 400 millioner mot et underskudd på NOK 602 millioner i forrige kvartal. Netto rentebærende gjeld var NOK 1 054 millioner ved utgangen av fjerde kvartal, med en egenkapitalandel på 34%.
Etter fjerde kvartal inngikk Norske Skog en avtale med Talley's Group, et New Zealand-basert næringsmiddelselskap, om å selge pelletsselskapet Nature's Flame for et vederlag på NZD 47,8 millioner, som tilsvarer ca. NOK 280 millioner. Det forventes at transaksjonen blir gjennomført i løpet av første kvartal i 2022.
De endelige investeringsbeslutningene for konvertering av avispapirmaskiner ved både Bruck og Golbey vil gi 760 000 tonn med konkurransedyktig, lavkostnads- og lavutslipps emballasjekapasitet. Emballasjeproduksjonen vil være fullt ut basert på resirkulert fiber og bruke grønn energi generert fra et nytt forbrenningsanlegg for avfall ved Bruckfabrikken og fra et nytt biomasseanlegg på fabrikkområdet i Golbey. I kvartalet har Norske Skog inngått attraktive låneavtaler på tilsammen EUR 265 millioner til finansiering av de to europeiske emballasjeprosjektene med et samlet investeringsbehov på EUR 350 millioner. Lånebetingelsene støtter den konkurransedyktige profilen til emballasjeprosjektene.
- Til tross for økende kostnadsnivå i Europa, skrider våre emballasje- og energiprosjekter frem i henhold til opprinnelig tidsplan og budsjett. Energiforbrenningsanlegget på Bruck er i igangkjøringsfasen, og vi vil ha en formell overtakelse fra Valmet i løpet av andre kvartal. Vi er stolte av å kunne betjene både publikasjons- og emballasjepapirmarkedet på en bærekraftig og lønnsom måte innen årsslutt, sier Sven Ombudstvedt.
Norske Skog jobber aktivt for å realisere verdier fra industrianleggene ved å utvikle eksisterende infrastruktur og bransjekompetanse. Arbeidet med å utvikle biokompositter (CEBICO) viste god fremdrift i kvartalet. Investeringen i en ekstruder på NOK 25 millioner, som muliggjør en omfattende økning i testvolumer for potensielle kunder, ble fullført i fjerde kvartal 2021.
Gjennom partnerskapene med Ocean GeoLoop på Skogn og Borg CO2 på Saugbrugs, har Norske Skog som mål å utnytte mulighetene til å bli CO2 netto negative, samt å utforske økonomisk levedyktige metoder for bruk av biogent CO2.
Sjølyst plass 2 P.O. Box 294 Skøyen, 0213 Oslo Norway
I tillegg har Norske Skog et mål om å eliminere bruken av fossilbaserte transportmidler innen 2050. Årlig bruker Norske Skog rundt 2-2.5 millioner tonn returpapir, tre og flis ved de europeiske fabrikkene.
– En forutsetning for gjennomføring av det grønne skiftet i europeisk industri og oppfyllelse av utslippsforpliktelser i Glasgow-avtalen, er at vår inn- og uttransport skjer med utslippsfrie transportløsninger, for eksempel på jernbane. Med dette vil vi oppnå både lavere karbonutslipp og lavere kostnader, sier Sven Ombudstvedt.
| NOK millioner (om ikke annet er oppgitt) | Q4 2021 | Q3 2021 | Q4 2020 | 2021 | 2020 |
|---|---|---|---|---|---|
| Resultatregnskap | |||||
| Totale inntekter | 3 092 | 2 642 | 2 476 | 10 315 | 9 612 |
| EBITDA | 422 | 111 | 146 | 662 | 736 |
| Driftsresultat | 479 | -565 | -1 276 | -160 | -1 339 |
| Resultat for perioden | 400 | -602 | -1 363 | -363 | -1 884 |
| Kontantstrøm | |||||
| Netto kontantstrøm fra operasjonelle aktiviteter | 317 | -99 | 73 | 191 | 549 |
| Netto kontantstrøm fra investeringsaktiviteter | -326 | -168 | -217 | -891 | 302 |
| Driftsmargin og lønnsomhet (%) | |||||
| EBITDA margin | 13.6 | 4.2 | 5.9 | 6.4 | 7.7 |
| Avkastning på investert kapital (annualisert) | 8.1 | -20.8 | -8.6 | -7.8 | 2.1 |
| Kapasitetsutnyttelse (produksjon/kapasitet %) | 95 | 95 | 81 | 89 | 77 |
Samlet årlig produksjonskapasitet for publikasjonspapir for konsernet er 2,1 millioner tonn. I Europa er konsernets kapasitet 1,8 millioner tonn, mens i Australasia er kapasiteten 0,3 millioner tonn. Norske Skog har en rekke pågående fiber- og energiaktiviteter ved alle industrianlegg.
Driftsinntektene økte fra forrige kvartal som følge av høyere salgspriser. Salgsprisene økte i kvartalet på grunn av høyere energi- og råvarekostnader. Variabel kostnad per tonn økte i kvartalet på grunn av betydelig høyere energikostnader. Faste kostnader per tonn var på linje med forrige kvartal. Ifølge Eurograph falt etterspørselen etter standard avispapir i Europa med 4% til og med november sammenlignet med samme periode i 2020. Etterspørselen etter superkalandrert magasinpapir (SC) falt med rundt 1%, og LWC magasinpapir økte med rundt 1% til og med november sammenlignet med samme periode i 2020. Kapasitetsutnyttelsen var uendret fra forrige kvartal på 96%.
Driftsinntektene gikk svakt ned sammenlignet med forrige kvartal på grunn av lavere leveranser, men ble noe motvirket av en liten prisøkning. De variable kostnadene per tonn var lavere sammenlignet med forrige kvartal på grunn av noe lavere energi- og råvarekostnader. Lønnskostnader var noe lavere, også per tonn, grunnet stengningen av papirproduksjonen ved Tasman. I følge offisiell handelsstatistikk økte etterspørselen etter avispapir i fjerde kvartal i Australasia med 1% sammenlignet med samme periode i 2020. Kapasitetsutnyttelsen var som i forrige periode 87%.
Energi- og råvaremarkedene er fortsatt svært volatile og usikre inn i 2022. De rekordhøye økningene for de største innsatsfaktorene, spesielt energi, viser ikke tegn til å avta med det første. De fortsatt høye prisene på energi, returpapir og andre innsatskostnader inn i 2022 har resultert i nødvendige prisøkninger for publikasjonspapir for alle kvaliteter i Europa.
De betydelige kapasitetsstengningene og emballasjekonverteringene i bransjen har påvirket markedsbalansen for publikasjonspapir positivt. Ytterligere kapasitetsstenginger har blitt annonsert for 2022 og 2023. Kapasitetsutnyttelsen i bransjen forventes å forbli høye i 2022.
Energiforbrenningsanlegget ved Norske Skog Bruck er i igangkjøringsfasen og forventes å være i full drift i løpet av andre kvartal. Når energianlegget er fullt operativt, vil dette redusere gassforbruket og dermed CO2-utslippene betydelig for Norske Skog Bruck.
Norske Skog gjennomfører forberedende grunnarbeider for etablering av emballasjepapirproduksjon både ved Norske Skog Bruck og Norske Skog Golbey, samt utfører de nødvendige kommersielle markedsforberedelser. Produksjon av emballasjepapir forventes å starte ved Norske Skog Bruck i fjerde kvartal 2022, og ved Norske Skog Golbey i fjerde kvartal 2023.
Norske Skog vil utvikle forretningsmuligheter for CEBINA og CEBICO. Dette betyr å evaluere en potensiell kapasitetsøkning for CEBICO utover den eksisterende pilotanleggskapasiteten på 300 tonn årlig. Pilotanlegget vil muliggjøre produksjon og leveranser av større testvolumer til potensielle kunder.
Norske Skog er en verdensledende produsent av publikasjonspapir med sterke markedsposisjoner og kundeforhold i Europa og Australasia. Norske Skog konsernet driver fire fabrikker i Europa, hvorav to vil produsere resirkulert emballasje etter gjennomføringen av de planlagte konverteringsprosjektene. I tillegg driver konsernet en papirfabrikk i Australia. Norske Skog tar sikte på å diversifisere virksomheten ytterligere og fortsette omstillingen til en voksende og høy-margins virksomhet gjennom en rekke spennende energi- og fiberprosjekter. Konsernet har cirka 2.150 ansatte, hovedkontor i Norge og er notert på Oslo Børs under tickeren NSKOG.
Selskapet vil ikke holde en live presentasjon, men vil arrangere et webinar idag klokken 08:30 for forhåndsregistrerte deltakere. Presentasjon, kvartalsregnskapet og pressemeldinger er tilgjengelig på www.norskeskog.com og publisert på www.newsweb.no under tickeren NSKOG. Hvis du ønsker å motta Norske Skogs pressemeldinger på publiseringstidspunktet, kan du abonnere på dette gjennom www.newsweb.no.
Norske Skog kommunikasjon og samfunnskontakt
For ytterligere informasjon: Norske Skog media: Kommunikasjonsdirektør Carsten Dybevig Email: [email protected] Mob: +47 917 63 117
Norske Skog finansmarkedet: Investor Relation Manager Even Lund Email: [email protected] Mob: +47 906 12 919
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