INTERIM REPORT JANUARY - MARCH 2003

* Profit after net financial items, SEK m Jan. – Mar. 15 MSEK (4)

* Earnings per share after net

financial items, SEK m Jan. – Mar. 0.09 SEK (0.02)

* Cash flow per share, SEK Jan. – Mar. -0.15 SEK (-0.08)

* Shareholders’ equity per share, SEK 9.39 SEK (31 December 2002: 9.33)

* Equity/assets ratio 74 % (31 December 2002: 72%)

* Very good deliveries in the first quarter 2003 and substantial price increases for NBSK pulp in USD, partly countered by a weakening of the US dollar exchange rate

* The earlier forecast stating a better result for 2003 as a whole than for 2002, is still valid.

ROTTNEROS IN BRIEF

Rottneros, with its origins in the 1600s, is an independent and flexible supplier of customised, high-quality paper pulp. Through continuous product development, high delivery reliability, technical support and service, Rottneros is able to adapt to satisfy its demanding customers.

As one of the world’s leading independent market pulp producers, Rottneros is a market leader in groundwood pulp for the open market and one of the main producers of other grades of pulp.

Rottneros has a total production capacity of more than 700,000 tonnes of pulp per year produced at five mills in Sweden and Spain, making the Group one of the ten biggest suppliers of market pulp in the world. Increasingly intensive product development in accordance with customers’ demands should lead to more stable and higher profitability throughout an economic cycle. The Group has a financial hedging policy to even out earnings over the economic cycle.

THE PULP MARKET

2003 started with substantial price increases on the pulp market. Since the beginning of the year the price of NBSK (Northern Bleached Softwood Kraft, bleached long-fibre sulphate pulp) has increased by USD 80 per tonne to USD 520 per tonne in March. The price of BEK (Bleached Eucalyptus Kraft) has increased by USD 60 per tonne to USD 510 per tonne in March. Further price increases of USD 40 per tonne for NBSK and USD 30 per tonne for BEK took effect from 1 April this year.

Capacity utilisation (production) within the Norscan region during the period was 93.6%, which is relatively high (cf. 90.3% in the same period in 2002). However, the pulp industry in the USA had a lower capacity utilisation rate due to a shortage of raw materials, which made a substantial contribution to the good demand currently prevailing on the pulp market. The good level of demand is also illustrated by very high deliveries at 96.4% compared with 90.6% in the same period in 2002.

Producer stocks of pulp within the Norscan region stood at 1,475,000 tonnes at the end of the first quarter, a reduction of 164,000 tonnes from 1,639,000 tonnes at the end of 2002. During this period customer stocks have remained unchanged, making total stocks of pulp lower.

The market for the the important customer segment wood-containing paper has been weaker than the market for the woodfree paper qualities. The decline of the USD has been compensated by price increases of pulp.

Price increases were also implemented for certain grades of paper early in 2003, while producers of other grades are negotiating price increases to be introduced during the first half. Manufacturers of so-called woodfree grades of paper have been more successful in their negotiations than producers of wood-containing paper.

PRODUCTION AND DELIVERIES

The Group’s five pulp mills in Rottneros, Rockhammar, Utansjö, Vallvik and Miranda in Spain have a combined production capacity of some 700,000 tonnes per year. Production in the first quarter 2003 reduced by 5,600 tonnes compared with 2002. Deliveries increased by 10,000 tonnes or 6 %. The Group’s order book has been very good, with low stock levels of pulp.

(FOR TABLE SHEET SEE ATTACHED FILE)

The average capacity utilisation of production resources at the mills during the reporting period was relatively high, except for groundwood pulp. The capacity utilisation was 89 % (92), which breaks down as magnefite pulp 90 % (86), groundwood pulp 75 % (84) and CTMP 84 % (91). The capacity utilisation for sulphate pulp was 97 % (97). The low capacity utilisation for mechanical pulps is primarily due to the decision to reduce production at Utansjö during parts of January as a result of the high electricity prices, as well as unplanned production shutdowns at Rottneros. The Group had no planned maintenance shutdowns in the first quarter of 2003. A maintenance shutdown is scheduled at Rockhammar in the second quarter of 2003.

In June 2001 the decision was taken to change from two shifts to one at the sawmill in Rockhammar, thereby reducing production as well as focusing on the manufacture of products based on a coarser range of raw materials. The sawmill subsequently operates with a capacity of 65,000 m3. In the third quarter 2002 extensive maintenance investments were made as well as new investments to adapt the sawmill to working with coarser timber and thus a range consisting of sawn timber with larger dimensions. These adjustments also affected production levels in the first quarter 2003. In the first quarter 2003 production at the sawmill amounted to 10,500 m3 (12,600), while deliveries amounted to 10,300 m3 (13,500).

INVOICED SALES AND RESULTS

January – March 2003 compared with January – March 2002

The Group’s net turnover was SEK 640 million (655). Pulp accounted for SEK 619 million (634) of net turnover and sawn timber for SEK 22 million (21).

There were three main elements to the SEK 15 million reduction in turnover in the first quarter. The USD exchange rate had a negative effect of SEK -123 million; this was partly compensated by higher pulp prices (contributing SEK 68 million) as well as an increase in deliveries (SEK 40 million).

The consolidated operating result was SEK 16 million (1). The operating result for the pulp-producing units amounted to SEK 18 million (4) and for the sawmill in Rockhammar SEK

-2 million (-3).

The improved operating result is mainly attributable to a positive result of SEK 79 million from financial hedging compared with a negative net hedging result of SEK -20 million in the previous year.

The result after net financial items was SEK 15 million (4).

The parent company reported a result after net financial items of SEK 81 million (-18.2), which includes hedging activities.

Earnings per share after tax amounted to SEK 0.05 (0.01). Cash flow per share amounted to SEK

-0.17 (-0.08).

January – March 2003 compared with October – December 2002

Turnover in the first quarter 2003 increased by SEK 80 million compared with the fourth quarter 2002. The increase is mainly due to an increase in deliveries (SEK 89 million) and improved pulp prices (SEK 25 million). However, a weaker USD affected the result by SEK -34 million. The result after net financial items in the first quarter 2003 was SEK 15 million compared with SEK 21 million in the same period last year. The result for the fourth quarter was affected by non-recurring items totalling SEK 17 million, primarily a reversal of the environmental reserve for Miranda. Hedging activities produced a result of SEK 79 million in the first quarter compared with SEK 65 million in the fourth quarter of 2002, i.e. an increase of SEK 14 million.

ACCOUNTING PRINCIPLES

The new recommendations from the Swedish Financial Accounting Standards Council with effect on quarter 1 2003 are being applied from this report. All other accounting principles are unchanged from those applied in the last annual report.

RISK MANAGEMENT

During the reporting period the Group suffered from the fact that the average USD exchange rate was 18% lower relative to SEK than in 2002. This had a negative effect on earnings of SEK

-122 million. At the same time, currency hedging affected the result positively by SEK 32 million compared with the spot rate. The net impact of the USD thus amounted to SEK -90 million.

In principle, all pulp pricing is based on USD. Around 30% of the Group’s turnover is represented by a real flow in USD, while 70% of turnover is invoiced in other currencies.

For the coming 24 months the Group has hedged 90-95% of the real flow, which thus makes up around 30% of the underlying USD exposure. Forward hedging for the coming 24 months (2003 and 2004) has been concluded at an average rate of SEK 9.75 per USD. At the end of the first quarter 2003 exchange rate guarantees had been taken out for a total of USD 155 million at an average rate of SEK 9.93 per USD. Of these contracts, USD 58 million relate to the current year, at an average rate of 9.70. In addition, EUR 15 million has been hedged at an average rate of SEK 9.35 per euro. No hedging has been carried out for other currencies.

For the coming five quarters the Group has hedged pulp prices in SEK at levels of SEK 5,177 per tonne for a total of 50,000 tonnes annually. In the first quarter pulp price hedging had a positive effect on income compared with spot prices (PIX index) totalling SEK 15 million (0). Long-term customer agreements with price equalisation profiles in relation to NBSK have been signed, which is entirely in line with the company’s niche strategy.

The company hedges prices for purchasing electricity in Sweden. In Spain the electricity market remains regulated, with stable prices. Electricity price hedging in respect of consumption in Sweden means that the average cost of electricity is hedged for 97% of requirements at levels of SEK 0.26 – 0.27 per KWh for the current year, for 97% of requirements at a level of SEK 0.23 in 2004 and for approx. 95 % of requirements at a level of SEK 0.22 in 2005. Financial hedging of electricity prices allows Rottneros to obtain compensation for high electricity prices irrespective of whether or not electricity is consumed. The contracts for 2003 mean that the net cost of electricity after taking hedging into account will increase by around SEK 40 million compared with 2002.

The table below shows the market value of all hedging. Market values are assessed by independent parties and refer to the liquidation value, i.e. valuation in accordance with forward contracts as of 31 March 2003. The reference value is the spot rate on 31 March and is given as supplementary information. The hedging has a term of two to three years.

(FOR TABLE SHEET SEE ATTACHED FILE)

BUY-BACK OF THE COMPANY’S OWN SHARES

In the second quarter 2002 the company commenced the buy-back programme approved at the 2002 Annual General Meeting. A maximum of 10 % of the shares may be bought back, i.e. 18.8 million shares. The aim of the planned buy-back is partly to optimise the company’s capital structure, and partly to create opportunities to use its own shares as liquidity in future acquisitions.

In 2002 the company bought back 5,418,790 of its own shares at an average price of SEK 8.74 per share, making a total of SEK 47,352,411. In 2003 the company has bought back a further 1,237,000 shares at an average price of SEK 7.28 per share. The number of outstanding shares at the end of the quarter is 181,743,105.

CAPITAL INVESTMENTS AND FINANCIAL POSITION

The Group’s net capital investment in fixed assets amounts to SEK 24 million (38). The majority of these investments relate to the evaporation facility at Vallvik. In addition, investments were made in environmental plant and a new washing step at Rockhammar.

Liquid funds amounted to SEK 310 million at the end of the period, compared to SEK 350 mil-lion at the end of 2002. The company has no interest-bearing loans. Unutilised lines of credit totalled SEK 797 million. The equity/assets ratio was 74 %. Surplus liquidity is invested in low-risk securities in line with the company’s liquidity policy. Shareholders’ equity per share amounted to SEK 9.39 after taking into consideration translation differences in equity (31 December 2002: 9.33).

AVERAGE NUMBER OF EMPLOYEES

The average number of employees in the reporting period was 864 (863).

OUTLOOK FOR 2003

In conjunction with the year-end release it was stated: “The beginning of 2003 was characterised by improved demand for paper pulp, particularly in North America. This, in combination with restrictions on production, led to global increases in prices for paper pulp. The positive trend on the pulp market is expected to endure for the early part of the year; the latter part of the year is more difficult to forecast due to the uncertainty in the global economy. The result for the full-year 2003 is expected to be an improvement on the result for 2002”.

With regard to the pulp price increases during the first quarter 2003 the company has a positive view of the whole of 2003 in spite of the weakening of the USD. The earlier forecast stating a better result for 2003 as a whole than for 2002, is still valid.

EVENTS SINCE THE END OF THE REPORTING PERIOD

In early April it was decided to cut the workforce at the Utansjö mill by 25 people in line with the warning given in December 2002, as part of a restructuring programme.

UPCOMING FINANCIAL INFORMATION

28 July 2003 - Interim report (6 months) 2003

23 October 2003 - Interim report (9 months) 2003

For more information please visit the Rottneros website at www.rottneros.com.

Sunne, 29 April 2003

Lars Blecko

President and CEO

This report has not been reviewed by the company’s auditors.

Telephone conference from 15 to 16 hours . For participation call 08-727 77 50

A telephone conference will be held on 29 April between 3 and 4 p.m. Lars Blecko, President and CEO, and Anders Byström, CFO, will present the Q1 report and comment on it.

This time we have chosen to hold this conference instead of the usual analyst and press meeting since it is so close to the capital market days in Miranda, Spain and because of the Annual General Meeting in Sunne the same day.

Participants can start calling in to the meeting 15 minutes before the start of the conference.

To participate please call 08-727 77 50 and give code word “Hallvarsson&Halvarsson”.

Participants will be in a listening position, to enter a speaking position press 14, to leave the speaking position press 15.

In connection to this conference a number of ppt-pictures will be published on Rottneros’ web-site www.rottneros.com at around 14.45 o’clock.

(FOR COMPLETE INTERIM REPORT SEE ATTACHED FILE)