Arctic Paper S.A. Q4, 2021 - preliminary results*: Strong result and positive outlook for both pulp and paper
- Q4 sales revenue amounted to PLN 953,5mn (EUR1 208,8mn).
- EBITDA Q4 was PLN 69,2mn (EUR1 15,2mn) and the EBITDA marginal 7,3 percent
- FY 2021 sales revenue amounted to PLN 3412,6mn (EUR1 747,2mn).
- EBITDA FY 2021 was PLN 327,8mn (EUR1 71,8mn) and the EBITDA margin 9,6 percent
- Record-strong demand for paper; active measures to optimise income per machine hour.
- Preparation for the construction of a 17 MW solar power plant in Kostrzyn has begun.
- New Managing Director of Arctic Paper’s paper production in Sweden appointed.
- After the period: decision to invest in moulded tray factory together with Rottneros.
- Management Board will recommend a dividend of PLN 0.40 per share.
*The entire audited report FY2021 will be published on March 22.
“Solid results, a strong cash flow and nearly full production in graphical paper and pulp give us a resilient foundation as we continue to diversify and invest in packaging and renewable energy.”
Michal Jarczyński, CEO
Preliminary selected financial results: Arctic Paper Group & Arctic Paper (paper segment)
| PLN (million) | Q4, 2021 | Q4, 2020 | Changes | FY 2021 | FY 2020 |
| Sales revenue, Arctic Paper Group | 953,5 | 714,7 | 238,9 | 3412,6 | 2847,5 |
| Sales revenue Arctic Paper (paper segment) | 689,2 | 507,4 | 181,9 | 2408,3 | 1990,8 |
| EBITDA, Arctic Paper Group | 69,2 | 25,1 | 44,1 | 327,8 | 271,4 |
| EBITDA Arctic Paper (paper segment) | 31,2 | 50,9 | -19,7 | 160,2 | 235,3 |
| EBIT, Arctic Paper Group | 74,1 | -4,8 | 78,9 | 244,6 | 158,2 |
| EBIT Arctic Paper (paper segment) | 46,8 | 31,7 | 15,1 | 118,7 | 163,0 |
| Net profit, Arctic Paper Group | 54,7 | -14,8 | 69,5 | 175,9 | 103,6 |
| Net profit, Arctic Paper (paper segment) | 30,4 | 20,7 | 9,7 | 91,8 | 121,5 |
| Net profit per share2 (PLN/share) | 0,62 | 0,01 | 0,61 | 1,84 | 1,60 |
| Net debt | 119,1 | 134,0 | -14,9 | 119,1 | 134,0 |
Arctic Paper Group consists of Arctic Paper S.A. (parent company), Arctic Paper mills (paper segment) and pulp producer Rottneros AB in which Arctic Paper S.A. holds a 51 percent stake.
1Arctic Paper S.A. reports in PLN. In the English press release, the amounts above were converted to EUR at the average rates for the quarter respectively.
2 Net profit per share: net profit for the paper segment plus 51% of the net profit for Rottneros divided by the number of shares.
“In line with our 4P strategy, we will expand our investments in renewable and fossil-free energy. Rising and volatile energy prices confirm that this is the future.”
Michal Jarczyński, CEO of Arctic Paper S.A.
The year ended with a strong fourth quarter when both paper and pulp contributed in a balanced way to one of the best results in the Group's history. Consolidated sales for the fourth quarter increased by 33 percent to PLN 953.5 million (714.7 million) with EBITDA of PLN 69.2 million (25.1 million). For the full year, consolidated sales reached PLN 3412.6 million (2847.5 million) with an EBITDA of PLN 327.8 million (271.4 million). The Group's financial strength improved: net debt / EBITDA decreased to 0.36 (0.49) and operating cash flow reached PLN 238.2 million.
Demand for paper continued to develop positively during the period as the economic recovery was further strengthened in our European core markets. The strong demand has led to a shortage of paper when the printers shift sourcing from China to Eastern Europe due to logistical problems, a development that benefits Arctic Paper. The pulp price has been relatively stable, and we have effectively hedged our operations against volatile energy costs, while at the same time other costs are rising. To compensate for the effects, we raised our prices during the fourth quarter and again at the beginning of 2022. We are very close to full capacity usage, and we are now calculating profitability per machine hour to optimize production output. The fact that our average sales revenue per tonne has increased by 18 percent since Q4, 2020 illustrates the combined effect of higher prices and a healthier mix. Total paper production reached 167,000 tonnes for the period (150,000) with sales of 168,000 tonnes (146,000) and the pandemic had very limited impact on our business.
Our packaging business continued to grow and reached 18,600 tonnes for the full year, which corresponds to a growth of 118 percent compared to 2020. In mid-February, the boards of Arctic Paper and Rottneros have decided to proceed with the plan to invest 15 million euro in a moulded tray factory in Kostrzyn. The joint venture project is expected to be operational in 2023.
For the Group company Rottneros – the pulp segment – sales for the fourth quarter amounted to SEK 598 million (490 million) and EBITDA to SEK 88 million (-65 million). For the full year 2021, pulp segment sales amounted to SEK 2303 million (2093 million) with an EBITDA of SEK 385 million (77 million) while production reached 395 300 tonnes (412 600 tonnes). The European pulp market continues to be strong and Rottneros' niches - not least packaging - have grown during the year.
In line with our 4P strategy, we will expand our investments in renewable and fossil-free energy. During the period, we have begun to prepare a 17 MW solar cell installation in Kostrzyn. Rising and volatile energy prices confirm that this is the future. We have also agreed with a Polish-based company that will build a production facility on our premises in Kostrzyn and start production in 2025, from which we will buy recycled residual heat and thereby reduce emissions.
For 2022, we have positive outlooks for both pulp and paper. Solid results, a strong cash flow and nearly full production in graphical paper and pulp give us a resilient foundation as we continue to diversify and invest in packaging and renewable energy.
Michal Jarczyński, CEO of Arctic Paper S.A.
Further information provided by:
Michal Jarczynski, CEO, Arctic Paper S.A.
Phone +46 10 451 7005
michal.jarczynski@arcticpaper.com
Göran Eklund, CFO, Arctic Paper S.A.
Phone +46 10 451 7054