Norske Skog (NSKOG) Q4 2023 earnings summary

Executive summary

• Q4 EBITDA was NOK 760m, up from NOK 327m in Q3, driven by Saugbrugs insurance income and the Tasman site-sale gain; underlying paper markets remained weak.

• NOK 720m of insurance proceeds supported NOK 973m operating cash flow; net interest-bearing debt was NOK 2,590m and the equity ratio 42%.

• Bruck ramp-up continued and Golbey PM1 targeted H2 2024 start-up; publication-paper demand and industry utilisation remained under pressure.

Financial highlights

• Q4 operating income was NOK 3,763m and EBITDA NOK 760m, with a 20.2% margin; Q3 comparatives were NOK 3,036m and NOK 327m.

• Q4 operating earnings were NOK 629m, profit before tax NOK 586m and net profit NOK 482m.

• EBITDA included NOK 625m business-interruption insurance and a NOK 57m Tasman sale gain; Q4 also included a NOK 97m positive fair-value change and NOK 88m of impairments.

• FY2023 operating income was NOK 13,524m, EBITDA NOK 2,142m and net profit NOK 481m, versus NOK 15,214m, NOK 3,105m and NOK 2,572m in FY2022.

Outlook and guidance

• Packaging Paper EBITDA is expected to be negative in 2024, including Golbey PM1 start-up and higher per-tonne conversion and ramp-up costs.

• Golbey PM1 targets H2 2024 start-up; Bruck PM3 technical ramp-up is on plan, with improved deliveries under annual contracts from January 2024.

• Demand is expected to remain low in 2024; both publication and packaging markets face excess capacity, with utilisation weak until capacity is removed.

• Strategic targets for 2025–26: Publication Paper capacity 1,590 kt, 90% utilisation and 10% EBITDA margin; Packaging Paper capacity 760 kt, 95% utilisation and 20% EBITDA margin.