Norske Skog (NSKOG) Q3 2024 earnings summary

Executive summary

• Achieved positive EBITDA of NOK 91 million in Q3 2024, supported by growth in the Packaging Paper segment, despite challenging markets and margin pressure from high input costs and excess capacity.

• Maintained a solid cash position of NOK 1.6 billion, aided by a NOK 500 million green loan at Skogn.

• Implemented price increases for containerboard and newsprint to offset rising costs.

• Continued ramp-up of containerboard production, with Bruck PM3 reaching 85% utilisation and Golbey PM1 start-up revised to Q1 2025.

• Progressed Saugbrugs BCTMP project, with final investment decision expected in H1 2025 and insurance proceeds of NOK 615 million to be released upon investment.

Financial highlights

• Q3 2024 operating income was NOK 3,006 million, with EBITDA at NOK 91 million (3% margin), down from NOK 471 million in Q2 2024.

• Pre-tax profit was -NOK 156 million, impacted by write-downs and currency effects.

• Net loss for the period was NOK 153 million, with negative operating cash flow of NOK 272 million due to increased working capital.

• Net interest-bearing debt increased to NOK 3,717 million, mainly due to investments and working capital build-up.

• Equity ratio remained stable at 41%.

Outlook and guidance

• Positive EBITDA expected from packaging paper in 2024, with Golbey PM1 start-up in Q1 2025.

• Publication paper shipments in Europe expected to improve in Q4, but cost pressures and overcapacity persist.

• Raw material and energy markets remain uncertain, with recovered paper and pulpwood prices expected to stay high.

• Industry overcapacity in both publication and packaging paper markets requires closures to balance supply and demand.

• Saugbrugs BCTMP investment decision expected in H1 2025, with insurance compensation of NOK 615 million linked to project investments.