Nordic Paper (NPAPER) Q2 2024 earnings summary

Executive summary

• Net sales increased by 9% year-over-year to SEK 1,225 million in Q2 2024, driven by an 11% rise in sales volumes and strong demand, especially for sustainable paper products, though average prices remain 5% below last year.

• EBITDA reached SEK 280 million, up 30% from Q2 2023, with a margin of 22.9%, the second-highest ever and above the 20% target.

• Profit for the period increased 18% to SEK 171 million, with EPS at SEK 2.55.

• Demand remained healthy across all markets, with Europe showing the most significant recovery.

• The ongoing sales process of the main owner's stake has not impacted operational focus.

Financial highlights

• Operating profit was SEK 242 million, up 36% year-over-year, with a margin of 19.8%.

• EBITDA improved by SEK 65 million year-over-year, driven by higher volumes and lower variable costs.

• Cash flow from operating activities declined to SEK 175 million from SEK 245 million, mainly due to higher accounts receivable.

• Net debt/EBITDA ratio increased to 1.5 after dividend payout and investments, still well below the target of 2.5.

• Return on operating capital (12 months) was 30.0%, slightly down from 32.1% last year.

Outlook and guidance

• Market demand expected to remain healthy in Q3, with continued but slower product price increases to offset rising input costs, especially wood raw material.

• Planned maintenance stops in all production plants will impact Q3 output and costs.