Norske Skog (NSKOG) Q4 2024 earnings summary

Executive summary

• Sale of all Australasia assets completed, marking exit from the region after 25 years; proceeds expected at NOK 150 million with no gain or loss recognized.

• Transitioning from publication paper to packaging paper, with ramp-up of recycled containerboard capacity and ongoing fibre projects.

• Insurance settlement of NOK 540 million for Saugbrugs incident to be received and recognized in Q1 2025, providing financial flexibility.

• Strategic focus on cost efficiency, ramping up packaging paper, and new fiber projects across mills.

• Initiatives underway to secure financial position amid excess market capacity and cost pressures.

Financial highlights

• Q4 2024 EBITDA at NOK 33 million, down sharply due to higher energy and maintenance costs and lower sales prices.

• Total operating income for Q4 2024 at NOK 2,666 million, up from Q3 2024 but down from Q4 2023.

• Pre-tax loss of NOK 470 million, impacted by lower electricity contract valuations and impairments at Saugbrugs.

• Net interest-bearing debt increased to NOK 4,119 million, mainly due to investments.

• Equity ratio at 37% in Q4 2024.

Outlook and guidance

• Publication paper prices expected to remain stable; containerboard prices showing signs of increase with announced hikes for Q1 2025.

• Bruck PM3 to reach 95% capacity utilization in H2 2025; Golbey PM1 to start production end Q1 2025 and reach full utilization by 2027.

• Ongoing focus on cost reduction and working capital management to maintain competitiveness.

• Packaging paper EBITDA expected negative in 2025 due to fixed cost allocation from Golbey PM1.

• Significant proceeds from energy certificates and grants anticipated in 2026-27.