• Income after net financial items amounted to SEK 75 (31) million for the second quarter of 2015 and SEK 177 (50) for the six-month period, our best six-month performance in the current structure.
• Net turnover for the second quarter totalled SEK 456 (394) million, a 16% increase compared with 2014.
• Production volumes increased by 9% compared with the second quarter of 2014.
• The PIX price in USD declined during the second quarter and amounted to an average of USD 855. Denominated in SEK, the price decrease was 5% compared with the first quarter. Compared with the second quarter of 2014, the price increase in SEK was about 19%.
• Cash flow before investments for the second quarter of 2015 was strong at SEK 116 (-3) million and SEK 278 million on a rolling 12-month basis, compared with SEK 104 million for full-year 2014. Interest-bearing net receivables as of 30 June amounted to SEK 165 (-42) million.

Comments by the president

The second quarter remained strong for the Rottneros Group. Profit after net financial items was SEK 75 million, an improvement of SEK 44 million compared with the same quarter in 2014. As in the first quarter, the improvement was mainly driven by both currencies and the pulp market moving in the right direction in relation to the corresponding quarter in 2014. Increased sales and production were also important factors. Both plants delivered good profitability and substantial improvements in earnings.

The higher volumes can be explained by the higher availability in production, especially at Rottneros Mill. This clearly shows the results of our determined efforts towards higher production volumes that we have conducted over the past year. Compared with the corresponding quarter last year, production increased by 9 per cent for the Group. At Rottneros Mill, volume increased an impressive 16 per cent, driven by a sharp upswing in groundwood pulp.

In general, customer demand for our grades of pulp remains stable. However, we have experienced continued pressure on prices during the quarter, mainly driven by an increased supply on the market. Translated into SEK, prices continue to be high, thanks to the weakening of the SEK against the USD.

Absorption Express, the high yield pulp for absorbing fluids, which we launched last fall, continues to exceed our expectations with respect to demand. During the quarter, we carried out yet another successful product launch, Bulk Booster, Rottneros’ newly developed high-yield pulp for cardboard. It increases the bulk or thickness more than other available raw materials, increased bending stiffness is a quality that is crucial for many carton applications.

During the first half of the year Rottneros’ Board of Directors decided on the first investments, for a total of SEK 180 million, to kick off our long-term industrial plan, Agenda 500. The plan is to increase the capacity of the Group through successive investments to eliminate the bottlenecks in the two mills. Investments are planned in renewed production equipment as well as in a stronger organisation. The long-term goal is to expand Rottneros’ total capacity to reach a business volume of at least 460.000 tonnes of pulp per year, compared with the 345,000 tonnes produced last year. The total plan is about SEK 800 million for Agenda 500 in full, divided into about SEK 400 million in the medium term and SEK 400 million in the longer term. Compared with investment levels for increased capacity per tonne found in the international paper industry, Rottneros’ investments are highly competitive. The pace of the investments will be determined by Rottneros’ ability to allocate the increased volumes in the market.

We continue to have a good starting position for the future. The strong dollar more than compensates for the negative price trend. Our highly motivated employees are working intensively to expand our business towards higher volumes and thus more efficient production. I look forward to the coming year and the strategic steps that we will take.