Displaying items by tag: Norske Skog

For the fourth consecutive year Norske Skog is featured in CDP's (Carbon Disclosure Project) annual Nordic 'Carbon Disclosure Leadership Index'. This index, a key component of CDP's annual Nordic 260 report, highlights the Nordic companies which have displayed the most professional approach to corporate governance regarding climate change information disclosure practices.

- The ranking is an important recognition of our efforts to demonstrate openness on climate change issues, systematic reporting and follow-up are necessary if we are to be effective in our efforts to reduce emissions and save energy, says Sven Ombudstvedt, CEO in Norske Skog.

The Carbon Disclosure Project is an independent non-profit organisation which represents 551 institutional investors with $71 trillion in assets under management The CDP gathers information on corporations' greenhouse gas emissions, climate change related risks and opportunities, and sets standards for carbon disclosure methodology and processes.

Voith Paper has enabled the long-time customer Norske Skog Bruck, Austria, to achieve success through the application of SkyTop doctor blades on their PM 4 as well as during the shift internal kart race. In the early summer "Team E" of line 4 organized a kart race in the Austrian city of Graz, where the tires squeaked and the focus laid firmly on having fun. The well-established cooperation between Norske Skog and Voith was evident on the racetrack, where even on the roughest of asphalt surfaces both high performance and speed were achieved.

This also applies to the success on PM 4. For more than three years Voith SkyTop doctor blades have been used on the center press roll of the paper machine in Bruck an der Mur where wood-containing graphic paper is produced. The application of SkyTop on the center roll significantly helps in achieving improved paper machine performance. Doctor contamination was greatly reduced and the running time was considerably extended.

Moreover SkyTop achieves a constant roughness of the roll surface affecting the paper quality in a positive way. "With SkyTop blades we succeed in maintaining the roughness of the center ceramic roll for the entire roll cover width on the designated high level over several years", explains Gernot Christöfl, Assistant Line Manager PM 4. The performances on the racetrack and the increase in doctor blade efficiency together demonstrate the close and trustful cooperation between Norske Skog and Voith Paper.

Norske Skog Bruck PM 4 manufactures 57 to 90 g/m² wood-containing graphic paper at machine speeds of up to 1500 m/min.

Norske Skog’s gross operating earnings were NOK 248 million in the second quarter of 2011. This is somewhat weaker than in the first quarter, mainly affected by the magazine segment. Newsprint shows an increase in revenues, while the gross operating earnings in this segment were little changed from the first quarter.

“This has been a mixed quarter for Norske Skog. We have completed a refinancing process and reduced the debt, but we still do not achieve acceptable margins in our operations,” says CEO Sven Ombudstvedt of Norske Skog.

“We expect gradual price increases for our products, but we cannot expect the market to do the job for us. Going forward, we will also evaluate all options for further internal efficiencies”, Mr. Ombudstvedt says.

Operating earnings (IFRS) were minus NOK 202 million in the second quarter, compared to a positive NOK 225 million for the first quarter of 2011 and negative NOK 643 million for the second quarter of 2010. Financial items contributed negatively with NOK 70 million. In the first quarter the financial items were plus NOK 45 million. The result was a net loss of NOK 280 million, compared to net earnings of NOK 169 million in the first quarter of 2011 and a loss of NOK 874 million in the second quarter of 2010.

The gearing ratio was 0.85 at the end of the second quarter, compared to 0.90 at the end of the first quarter.

Segment information
Revenues from the segment newsprint in Europe increased compared to both the first quarter of 2011 and the second quarter of 2010. Gross operating earnings for the segment were somewhat weaker than in the first quarter of 2011 but better than in the second quarter of 2010. Prices have increased, but earnings were negatively affected by high input prices and a strong Norwegian krone.

The segment newsprint outside of Europe shows an increase in revenues compared to both the first quarter of 2011 and the second quarter of 2010. Gross operating earnings are marginally higher than in the first quarter of 2011 and somewhat lower than in the second quarter of 2010. The production volumes have increased in the second quarter.

The magazine paper segment experiences a reduction of both revenues and gross operating earnings compared to the first quarter of 2011 and the second quarter of 2010. The weaker results are due to lower sales volumes, currency changes and a higher export share. Production volumes are lower, especially when compared to the second quarter of 2010. This is strongly influenced by the fire at Norske Skog Saugbrugs in Halden, Norway, on 2 February. Normal production was resumed at the end of June.

Divestments in Brazil
Norske Skog in the second quarter entered into an agreement to sell all its shares in the energy company Enerpar in Brazil to SN Power Invest for BRL 120 million, about NOK 410 million.

A forest area of 21 500 hectares in Brazil was also sold in the second quarter for USD 63.5 million, about NOK 335 million.

From these two transactions the company could book a profit of NOK 139 million before tax in the second quarter, which contributed to the company being able to reduce net interest-bearing debt from NOK 9.0 billion at the end of the first quarter to NOK 8.4 billion at the end of the second quarter.

Refinancing
Norske Skog in the second quarter refinanced the company’s debt in two steps. First, a threeyear bank facility of EUR 140 million was arranged. Subsequently, a bond issue of EUR 150 million was completed. An existing bank facility of EUR 400 million was cancelled and repaid. Norske Skog continues to work on the financing situation, for instance through further asset sales.

“We now have sufficient funds through cash, asset sales and new financing to cover the maturities in 2011 and 2012. Our next big maturities will be in 2017 and later,” says the CEO, Mr. Sven Ombudstvedt. Following the refinancing, Standard & Poor’s adjusted the outlook for Norske Skog’s debt from “Negative” to “Stable”. The long-term rating is upheld at “B-“.

Outlook for 2011
Newsprint prices are expected to increase somewhat in the second half of the year. Within magazine, volumes are expected to increase in the second half. The volume increase is partly due to normal operations at Norske Skog Saugbrugs. The cost of most input factors will remain high, but the prices of energy and recovered paper show signs of moderating. Underlying gross operating earnings for all of 2011 are expected to improve somewhat from 2010.

Organisational change
Mr. Trond Stangeby has been engaged as Senior Vice President for Organisational Development from 15 August. He has extensive experience from the chemical industry through several leading positions in Norsk Hydro, Yara and INEOS. He currently works as an independent consultant. Mr. Stangeby will be a member of Norske Skog's Corporate Management team, and will be responsible for development of leadership and working processes in the company.

On the morning of 2 February, fire caused damage to part of the thermo-mechanical pulp plant which supplies the paper machines with fibre at Norske Skog Saugbrugs mill. Although the fire was quickly brought under control, it caused significant damage to the electrical cabling. No employee was injured as a result of the incident.

All production facilities of the mill have been stopped due to the fire. Norske Skog Saugbrugs has an annual production of 550 000 tonnes of super calandered magazine paper and employs 600 people. Property damages and business interruption are covered by insurance where Norske Skog's self retention is NOK 15 million.

- We are satisfied with the immediate and correct response to the fire from our own employees and the support from the community emergency response services. We are pleased that no one was injured in connection with the fire. We will do our utmost to re-establish normal production at Saugbrugs as soon as possible, says Norske Skog's CEO Sven Ombudstvedt.

Based on the initial reports from the mill, Norske Skog expects operations at Saugbrugs to be halted for some time. At present it is not possible to give more detailed information regarding the physical status of the operations. The fire is a force majeure event and Norske Skog has informed customers and suppliers of Saugbrugs about the situation.

Norske Skog has entered into an agreement concerning sale of Klosterøya to a consortium consisting of Conceptor Eiendomsutvikling AS and Bratsberg Gruppen AS, and has at the same time also finalised sale of a property at Nedre Ranheim. The total proceeds are approximately NOK 240 million.

After the shut down of Union mill, Norske Skog has devoted considerable resources to clearing up and developing Klosterøya, and the company sees it as a good solution that others now will take over the further development.

"This is a milestone for the development of Skien and the entire Grenland area. In cooperation with local authorities and businesses, Norske Skog has emphasised the development of residential, business and outdoor recreation areas. We consider the Bratsberg group and Conceptor Eiendomsutvikling to be ideal partners in moving this work forward", says Norske Skog's President and CEO Sven Ombudstvedt. 

Parts of the proceeds from the sale have been granted as seller's credit and will be paid off during a five-year period. Norske Skog will also retain a minority ownership share in Bratsberg Holding AS, which in addition to Klosterøya, will have a portfolio including several development properties in the cities of Porsgrunn and Skien.

The sale of Nedre Ranheim (Trondheim) to Maja Eiendom AS was finalised at the end of December.

Sale of the two properties will ensure a total accounting gain of around NOK 80 million. Most of this will be booked in the fourth quarter of 2010.

With the sale of Klosterøya and Nedre Ranheim, Norske Skog has sold properties in Norway for approx. NOK 280 million during 2010.

Oxenøen, 12 January 2011

Norske Skog
Communication and Corporate affairs

On Monday 11th Oct 2010, the news agency Thomson Reuters published an interview with the President and CEO of Norske Skog, Sven Ombudstvedt. The article from Thomson Reuters states that "Ombudstvedt said that business performance had been somewhat better than he expected during the third quarter of 2010." The formulation in the article must be due to a misunderstanding, since comments regarding the quarterly financial statements were not given in the interview. However, it was said that market development was somewhat better.

The results in the third quarter will continue to be weak, as it was guided in connection with the presentation of the financial statements for the second quarter. Norske Skog will publish the ordinary pre-quarterly release for the third quarter in Week 42.
 
Norske Skog has unsuccessfully tried to get Thomson Reuters to send out a corrected version of the interview.
 
Oxenøen, Oct 11, 2010
Norske Skog
Communications and public affairs
 
For further information:

Media:
Vice president corporate affairs
Carsten Dybevig
Mob: +47 917 63 117

The financial market:
Vice president investor relations
Jarle Langfjæran
Mob: +47 909 78 434

A telephone conference with a brief presentation of the quarterly results as well as an opportunity to pose questions from the financial market will take place on 5 August at 13.00 CET. The telephone conference will take place in English.

Connection details for the telephone conference:
Confirmation Code: 7241898

800 19640 (Norway Toll Free)
0800 028 1243 (UK Toll Free)
1888 935 4575 (USA Toll Free)
+44 (0)20 7806 1951 (International Toll)

Oxenøen, 29 July, 2010
Norske Skog
Investor relations

The announcement of Norske Skog's accounts for the second quarter of 2010 will take place on Thursday 5 August at 7.30 a.m. CET.

A press conference and presentation will be held in the Shipping club in Oslo city centre at 8.30 a.m. and an international telephone conference will be held at 1 p.m. The President and CEO, Sven Ombudstvedt, and other members of corporate management will participate in both of these events.

More information regarding this will be published on Norske Skog's website www.norskeskog.com.

The "silent period" preceding the announcement will start on Monday 26 July. Further information regarding special items in the income statement is enclosed.

Metso will supply advanced quality control solutions (AQC) to Norske Skog Albury to reduce TMP quality variability and energy usage. The Norske Skog Albury mill produces185,000 tons per year of bleached softwood TMP and has an annual paper production capacity of 285,000 tons per year.

After evaluating and trialing different advanced control technologies Norske Skog determined the AQC solution best meet their quality and economic objectives. The AQC system will be implemented on all four lines of refining. With the addition of Norske Skog Albury, Metso now has three AQC systems installed for mechanical pulping optimization within Norske Skog and twenty five systems globally.

Norske Skog is a world leading producer of newsprint and magazine paper, 14 paper mills around the world. The world market for newsprint and magazine paper is about 60 million tons, and the group has about 10 per cent and five per cent of these segments respectively. Annual sales are around NOK 20 billion and nearly 6,000 people are employed by Norske Skog.

For more information, please contact:
Adam Melton, Sales Manager, Metso, Automation business line, tel. +1 251 510 7589, This email address is being protected from spambots. You need JavaScript enabled to view it.
or
Devin Cole, Project Manager, Metso, Automation business line, tel. +1 770 263 2071, This email address is being protected from spambots. You need JavaScript enabled to view it.

Norske Skog has entered into an agreement to sell excess electricity to the Norwegian company Elkem for NOK 800 million. The deal gives Elkem a yearly supply of 1.5 TWh until 31 December, 2020. The power sold is being delivered in southern part of Norway, where Norske Skog does not need it for its own operations.

“The market has shown a considerable interest for this volume of electricity, and we are satisfied with the terms and the constructive dialogue with Statkraft. The divestment is an important part of our work to improve Norske Skog’s financial position” says Sven Ombudstvedt, President and CEO of Norske Skog.

Limited transmission capacity between different market regions prevents Norske Skog from using power delivered in southern Norway for the operations at Skogn in central Norway at acceptable commercial terms. Norske Skog is working to secure a long-term power supply for its operations at Skogn through a new regime guaranteed by the Norwegian state.

The sale of excess power is expected to give a cash payment of around NOK 770 million after transaction costs. It will entail an accounting loss after tax of around NOK 290 million. The final accounting effects of the transaction will be published in the pre quarter release preceding the publishing of Norske Skog’s results for the second quarter of 2010.

Following the transaction, Norske Skog maintains sufficient power supply to meet the needs of its operations in southern Norway (Norske Skog Saugbrugs and Norske Skog Follum) until 31 December, 2020.