Interim Report January - June 2001

Interim Report January - June 2001 Quarter January - June MSEK 2001 Q 2 2001 Q 1 2001 2000 Net turnover 3,031 4,890 7,921 13,369 Operating profit 1,703 689 2,392 1,486 Profit after 1,697 690 2,387 1,307 net financial items Earnings per share, SEK 20.70 4.07 24.77 7.16 - Calculated on average number of shares 95,157,179 118,373,034 98,990,715 * 118,373,034 * weighted average · Profit after net financial items increased in the second quarter by MSEK 1,007, compared with the previous quarter. In the first half of 2001, profit after net financial items rose by MSEK 1,080, compared with the first half of the previous year. This improvement is due to the sale of units. · Operating profit for remaining units excluding Billerud increased by MSEK 11 to MSEK 222, compared with the previous quarter. Operating profit for the first half of 2001 increased by MSEK 3 to MSEK 433, compared with the same period in 2000. · The sale of the Corrugated & Containerboard business area to the Dutch company Kappa was completed following EU approval in May. As of 1 January 2001, this transaction provided a capital gain (including tax effect) of MSEK 1,870. · In autumn 2001, the Board of Directors will call an extraordinary general meeting and propose a transfer of approximately MSEK 12,000 to shareholders through redemption of shares. Market Growth in the global economy is expected to remain weak throughout the rest of the year. At present, the decline in the US is expected to reach its lowest point in autumn at the earliest. Since the downturn in Europe started later than in the US, the weakening of the European economy will probably continue. A relatively stable volume development is expected for AssiDomän's remaining products despite slower demand growth than in the same period last year. Prices for cartonboard and sawlogs are relatively stable while a continued fall in market prices for sawn timber can be noted. Sales, results and profitability The sale of the Corrugated & Containerboard business area was completed in May 2001. In 2001, the business area is included in AssiDomän's consolidated accounts for the period January - April. Completed restructuring may make comparisons between different periods difficult (see below under Changes in the Group). Second quarter AssiDomän's net turnover for the period, MSEK 3,031, decreased compared with the previous quarter by MSEK 1,859 or 38% due to the sale of the Corrugated & Containerboard business area. Turnover for remaining units (excluding Billerud) rose 14%. Operating profit improved for all remaining units. Earnings were charged with a higher provision for intercompany profits in stocks. In the first quarter, elimination of the intercompany profit reserve had a positive impact on earnings. Taken overall, earnings increased by MSEK 11 compared with the previous quarter and amounted to MSEK 222. Profit after net financial items amounted to MSEK 1,697, an increase of MSEK 1,007 over the previous quarter. Corrugated & Containerboard, including the effects of the sale in the second quarter, had an impact on the result for the second quarter of MSEK 1,319, compared with MSEK 237 in the first quarter. Capital gains from the sale of properties amounted to MSEK 20 compared with MSEK 3 in the first quarter. Net financial items amounted to MSEK -6 compared with MSEK 1 in the first quarter. The positive effect of the purchase price received from Kappa during the quarter was neutralised by the share redemption carried out in the first quarter. January - June Net turnover for the first six months of 2001, MSEK 7,921, decreased compared with the first half of 2000 by MSEK 5,448 or 41%. This change is essentially attributable to the sale of operations in both 2000 and 2001 as well as the formation of Billerud. Turnover for remaining units was on a par with the previous year. Operating profit amounted to MSEK 2,392, compared with MSEK 1,486 for the first half of 2000. The overall earnings impact from Corrugated & Containerboard amounted to MSEK 1,610 (495). The results for the previous year included MSEK 318 for units later sold to Frantschach. The capital gain from the sale of properties amounted to MSEK 23 (32). Operating profit for remaining units increased by MSEK 3 to MSEK 433. Cartonboard in particular, but also Wood Supply & Forestry, noted improved results while the trend for Timber was less favourable. The operating margin amounted to 11% during the period. Profit after net financial items amounted to MSEK 2,387, compared with MSEK 1,307 in the same period last year. Net financial items improved by MSEK 174. This is mainly due to purchase prices received for sold operations, lower debt as a result of the establishment of Billerud and an additional purchase price from Frantschach of MSEK 52. Positive net tax of MSEK 66 is reported for the period. This reflects a 28% tax charge for remaining operations and a positive tax effect of MSEK 300 from the sale of Corrugated & Containerboard. In the first half of 2000, the tax charge was MSEK 457, corresponding to a tax rate of 35%. Return on capital employed amounted to 19% during the period and return on equity was 21%, both calculated on a full-year basis. The number of employees decreased due to the sale of operations and rationalisation measures. The average number of employees in remaining units amounted to 2,255. Investments, cash flow and financial position Investments amounted to MSEK 433 in the period January - June. The amount for remaining units was MSEK 171. Cash flow from operating activities amounted to MSEK 1,927. Interest- bearing net cash amounted to MSEK 4,784 at 30 June 2001, compared with a net debt of MSEK 2,177 at year-end 2000. This change was mainly attributable to liquid assets received from the sale of Corrugated & Containerboard and payment of the MSEK 4,411 share redemption decided in 2000. The establishment of Billerud reduced the interest-bearing net debt by MSEK 1,522. The Group's visible equity ratio was 72% at the end of the period, compared with 62% at the beginning of the year. The debt/equity ratio was -0.21 (0.09). Business areas Cartonboard Second quarter The general market situation for packaging board was characterised by stable but weak demand with short order stocks. Earlier price increases were accepted by the market. AssiDomän's delivery volumes increased slightly during the period. The average price also rose, as a result of earlier price increases and an improved delivery mix. Operating profit for the quarter amounted to MSEK 56, compared with MSEK 40 in the previous quarter. Higher selling prices, lower raw material prices and increased deliveries contributed to this improvement. January - June Operating profit for the period was MSEK 96, an increase of MSEK 68 compared with the same period last year. This improvement was mainly attributable to higher selling prices which were due, among other things, to an improved delivery mix and improved productivity. Timber Second quarter The European market for sawn timber remained uncertain during the quarter with falling prices for both redwood and whitewood products. Although demand remained high, a surplus exists. AssiDomän's deliveries were largely unchanged compared with the previous quarter. Operating profit for the quarter amounted to MSEK 11 compared with MSEK 2 in the previous quarter. The reasons for this improvement included a favourable foreign exchange trend. January - June Operating profit for the first half of the year was MSEK 13, a decrease of MSEK 14 compared with the same period in 2000. Lower selling prices were the main contributor to this decline. Wood Supply & Forestry Second quarter The timber market improved slightly during the period. Prices have stabilised. In southern Sweden, however, there is still a surplus of spruce timber and pulpwood. The market in northern Sweden is more balanced but with a shortage of spruce timber. Operating profit amounted to MSEK 274, compared with MSEK 235 in the previous quarter. This improvement was mainly due to higher delivery volumes. January - June Operating profit amounted to MSEK 509, compared with MSEK 493 in the same period last year. Delivery volumes from the Group's forests remained largely unchanged. Lower costs compensated for the slightly lower prices. Billerud Second quarter Development for market pulp and kraft paper was weak during the period. The market for containerboard was more balanced but with some price reductions. Operating profit amounted to MSEK 319, a decrease of MSEK 150 compared with the previous quarter. Lower prices for market pulp and the planned annual production shutdown at Skärblacka were the main factors behind this decline. Profit after net financial items amounted to MSEK 292. January - June Operating profit in the first half of 2001 amounted to MSEK 788, compared with MSEK 515 in the same period in 2000. Higher average prices including a favourable foreign exchange trend contributed to this improvement. Profit after net financial items amounted to MSEK 733. AssiDomän AB (publ) SE-105 22 Stockholm Corporate Identity No. 556016- 9020 Tel +46 8-655 90 00 Fax +46 8-655 94 01 E-mail: mailbox@asdo.se Internet website: http://www.asdo.se ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/07/31/20010731BIT00010/bit0001.doc http://www.waymaker.net/bitonline/2001/07/31/20010731BIT00010/bit0001.pdf