Operating revenues in the fourth quarter totalled NOK 1,528 million, compared to NOK 1,380 million for the same period last year. All three divisions contributed to the higher profit figure, which is a consequence of higher market activity in general and higher production capacity in Modular Buildings in particular. Operating profit in the fourth quarter totalled NOK 46 million, compared to NOK 6 million for the same period in 2004. The higher result is due to the positive effect of a number of cost-cutting measures, combined with somewhat higher prices in some markets. Ordinary pre-tax profit in the fourth quarter totalled NOK 37 million (loss of 9 million). Profit after taxes totalled NOK 22 million, compared to a loss of NOK 23 million for the same period the year before. Overall profit per share for the year 2005 totalled NOK 0.52, compared to a loss of NOK 0.02 for the same period last year.

Focus on efficiency
- There are a number of reasons for the favourable profit figure in 2005. The markets the Group operate in developed positively in 2005, and the last quarter of the year ended with market activity at a somewhat higher level than in previous years. The focus the past two years has been on coordinating the business activities of the many companies that the Group has purchased in recent years. A number of internal efficiency measures were implemented in 2004, many of which are starting to generate very positive results, says President and CEO Hans Rindal in Moelven Industrier ASA.

 

Mr. Rindal is pleased with the positive profit development in 2005, yet sees it in the context of a period with solid demand for the Group's products and services. - Even though the profit figures compared with the previous year are significant, the efficiency measures and coordination of business activities must continue in order to strengthen the Group's position even further, says Mr. Rindal.

Steady progress in all divisions

In the Timber and Wood divisions, the higher profit figure has come about primarily as a result of a number of measures implemented to reduce costs. At the same time, a greater focus on the more efficient use of raw materials in both divisions has generated additional positive results. The steady improvement in all business areas in Building Systems (Laminated Timber, Modular Buildings and Interior Layouts) is primarily due to the implementation of cost-cutting measures, but must also be viewed in the context of improved market conditions for certain segments.

 

Moelven's Board anticipates that the overall demand for the Group's products will continue at the same level as the year before. The construction of new housing in Norway is anticipated to stabilise or even decline, while business activity in the commercial building sector is expected to increase somewhat. Overall, the businesses in the Building Systems division have an order reserve at the start of the year that is somewhat better than normal. For the sawmill plants, sufficient access to local raw materials is critical for profitability, and in certain regions it may be necessary to carry out changes to operations as a result of a reduction in the availability of raw materials.

 

Compared to earlier years, planned investments in existing plants in 2006 will increase significantly, and most of the investments should generate positive results by the end of the year. Overall, the Board anticipates that operating revenues and profit for the year will be at about the same level in 2006 as in the previous year.

 

The report can be downloaded from the following link: