Strong krona dents Nordic mills’ Q1 results

But Moelven Industrier ASA sought to find positives by predicting the first quarter "may appear" to be the bottom of the recession for industrial wood internationally.

Moelven recorded an operating loss of NKr64m (2012: NKr18.7m profit).

Moelven CEO Hans Rindal said he expected a normal seasonal improvement in demand during the second quarter, but no early improvement in underlying market conditions.
Mr Rindal said significant investment in the start-up of two processing plants - Moelven Profil AS in Kirkenaer and Moelven Tom Heurlin AB in Dalsland - affected the group's profitabilty in the first quarter, while pulp and paper sector developments were affecting the Nordic forestry and timber industry.

"We are currently working hard to ensure timber and fibre flows to three sawmills in particular - Moelven Soknabruket AS, Moelven Numedalslågen AS and Moelven Telemarksbruket AS," said Mr Rindal.

SCA's forest products division - which comprises solid wood products, pulp and some paper products - saw its operating profit fall by 22% to SKr257m (2012: SKr331m).

Figures for each segment in the division, including solid wood, have not been released.

The group said wood product sales decreased as a result of lower prices, including exchange rate effects that were not fully compensated for by higher volumes, while demand in western Europe was "weak".

Solid wood delivery volumes were 521,000m3 in the first quarter, up 5% on a year ago.

The division's results included negative exchange rate effects of approximately SKr110m.

Stora Enso revealed a group loss before tax of €-36m (2012: €90m), with its Building and Living division - which includes the sawmilling business - recorded earnings before interest and tax of €4m, 60% down on a year ago, from sales of €441m.

Setra first quarter operating loss of SKr26m, from sales of SKr945m (2012: SKr1.06bn), is almost the same level as the same period a year ago - SKr27m.

Stefan Lundin, Setra's acting CEO. said the strengthening krona had negatively affected the operating results by more than SKr20m.
"The small price increases we noted in several of our key export markets during the period were eaten up by what for us was the negative exchange rate development," he said.

Södra recorded operating losses of SKr84m, while Holmen Timber's operating losses were SKr35m.

"We expect to see slightly higher prices for sawn timber products over the year," said Gunilla Saltin, Södra's acting group president.
"With raw material prices and currency exchange rates as they are, 2013 will nevertheless be a tough year for southern Swedish sawmills."

Södra produced 359,000m3 of sawn timber during the first quarter (2012: 356,000m3).

Work on increasing production at the new Väro sawmill is ongoing and production will switch to a three-shift system in the autumn.
Holmen Timber's deliveries were 10,000m3 lower than a year ago at 163,000m3.