THE ARCTIC PAPER GROUP IN 2016
VERY GOOD RESULTS IN THE PAPER SEGMENT AND SIGNIFICANT IMPROVEMENT IN FINANCIAL SITUATION
In 2016 the Arctic Paper Group generated sales revenue of PLN 2.97bn (CHF 743m), 2.3% higher than the year before. EBITDA was over PLN 249.6m (CHF 62.5m) with a growth of 17.4% from 2015, and operating profit on continuing operations* exceeded PLN 125m (CHF 31.3m) (up 24.7%).
The excellent results achieved by Arctic Paper in the paper segment should be stressed. The Group produced solid sales volume, translating into increased market share. Also a increase in revenue was generated and this despite the continued difficult market situation. Combined with the results of the Profit Improvement Program 2015/2016 and favourable prices of short-fibre pulp, this translated into achievement of very good operating results in this segment.
Results in the paper segment (excluding Rottneros)
Revenue from sales in the paper segment in 2016 was nearly PLN 2.22bn (CHF 556m), 3.5% higher than in 2015. EBITDA rose to over PLN 148m (CHF 37m), an improvement of 111.1% year-on-year. Net profit on continuing operations* rose to PLN 34.1m (CHF 8.6m), as against a loss of PLN 7.2m (CHF 1.8m) the previous year.
In Q4 2016 the market for fine graphical papers continued to shrink, noting a decline of 6.1% (compared to Q4 2015, according to EuroGraph data). In the same period Arctic Paper increased its sales volume by up 0.6%, thus strengthening its market position.
The average use of production capacity in 2016 was 96%, or 2% higher than in 2015.
Per Skoglund, acting CEO of Arctic Paper, commented on the recently completed year: “In the aspects of market presence, production efficiency and product development we have shown endurance, resulting in a good year 2016. Also, the Profit Improvement Program 2015/16 has now successfully met its target, with savings of PLN 46m (CHF 11.5m) during 2016, and the remaining part in Q1 2017, translating into growth in efficiency in the paper segment. Another positive factor was the decline in the cost of short-fibre pulp, the most important raw material used in our manufacturing."
Results including Rottneros
The results and profit of Rottneros in 2016 were again very solid, despite a decline in prices of the long-fibre pulp (NBSK), produced by Rottneros, by 1.2% (compared to Q4 2015). In a historical perspective, the level of earnings and profitability remained good.
The fourth quarter is usually a weak quarter for Rottneros because of the annual maintenance shutdown at the Vallvik mill, along with the commissioning of new investments, and 2016 was no exception.
The sales revenue of the Arctic Paper Group in Q4 2016 fell slightly, by 0.5%, compared to Q4 2015. EBITDA was PLN 38.4 (CHF 9.6m) which is +51.5% y/y, and the net result on continuing operations in Q4 2016 was over PLN 1.9m (CHF 0.5m).
New financing structure
In 2016 the Arctic Paper Group successfully completed the process of changing the structure for financing of its operations in the paper segment.
The centralized financing enables more effective management of financial liquidity and flexible adjustment of the level of financing of specific Group companies. This increases the Group’s competitiveness and also enables improvement in resource management. Additionally, Arctic Paper can continue investments in new products at all of its plants on a wider scale than before.
Per Skoglund added: “The aim to reduce our net debt to EBITDA ratio and optimize our working capital continued with intensified efforts during 2016. In Q3 2016 we managed to create a new and truly improved structure for financing of our operations. This meant full repayment of the prior indebtedness and complete implementation of the new financing structure during 2016. Thus the financial stability was greatly improved and the flexibility that the volatile market demands was increased."
Further information for the media provided by:
Per Skoglund, Acting CEO, Arctic Paper S.A.
Tel. (+46) 31 63 1703
Montag, 20 Mrz, 2017