Fray Bentos, Uruguay, 23 July 2009 -- In the first half of 2009, Botnia’s sales fell by 28% compared to the corresponding period last year, amounting to EUR 585.0 million (EUR 810.4 million, January–June 2008). Pulp sales volume remained at the same level as last year (i.e., 1,560,000 metric tons).
Operating result excluding nonrecurring items was EUR -89.5 million, falling clearly short of the first half of 2008 (EUR 119.7 million). The rapid decline of the market situation and the price of pulp had a considerable effect on the decline of net sales and the result. The result also was weighed down by production curtailment shutdowns at all Finnish mills. However, the utilization rate of the Uruguay mill has remained high and the result of the mill slightly positive.
In the second quarter of 2009, Botnia’s sales fell by almost 7% compared to the first quarter, amounting to EUR 282.5 million (EUR 302.8 million in January–March 2009). Botnia’s operating result remained weak in the second quarter at EUR -42.1 million (-47.4 in January–March 2009). Total net sales for the second quarter of 2009 remained at the same level as in the previous quarter. The currency-denominated market prices increased by 3% for softwood pulp and decreased by 5% for hardwood pulp. The U.S. dollar weakened by almost 5% compared with the first quarter.
The Fray Bentos mill reached its production target by producing a million metric tons of pulp between May 2008 and April 2009. In total, the mill has now produced more than 1,300,000 metric tons of pulp, which equates to 57 shiploads from the Port of Nueva Palmira to Europe and Asia.
Global pulp inventory levels are normalizing, and the recent price increases suggest slight signs of positive profit development for the second half of the year. Paper mill utilization rates are, however, expected to remain low in Europe. This means that no significant improvement is to be expected in the market situation as far as Europe is concerned.
In summary, results for January–June 2009, (compared with January–June 2008) were as follows:
- Sales EUR 585.0 million (EUR 810.4 million in January–June 2008)
- Operating profit excluding nonrecurring items EUR -89.5 million (EUR 119.7 million)
- Operating profit including nonrecurring items EUR -164.5 million (EUR 119.7 million)
- Profit before taxes and excluding nonrecurring items EUR -104.0 million (EUR 99.1 million)
- Investments EUR 19,7 million (EUR 43.2 million)
- Return on capital employed excluding nonrecurring items -8.5% (12.5%)
- Return on capital employed including nonrecurring items -15.7% (12.5%)
- Equity ratio 61.0% (60.9%)
- Net gearing 42.7% (41.1%)