Rottneros (RROS) Q1 2025 earnings summary

Executive summary

• Achieved stable production in Q1 2025 despite high raw material costs, market uncertainty, and a 5% decline in net turnover to 652 MSEK.

• EBIT fell sharply to SEK -62 million from 5 MSEK, with net income at -56 MSEK, and EBITDA dropped 27% year-over-year.

• Cost-saving and efficiency measures initiated, including negotiations with unions, a reduction of 47 employees, and targeted annual savings of SEK 35–40 million.

• No dividend for 2024; focus remains on maintaining a strong balance sheet and liquidity.

• Investments completed to support operational stability and future growth, including new production lines and innovation initiatives.

Financial highlights

• EBIT for Q1 2025 was SEK -62 million, with EBITDA at -27 MSEK, and net turnover at 652 MSEK, reflecting significant margin deterioration.

• Negative impacts from weaker US dollar (SEK -24 million), rising wood costs, and weak CTMP demand.

• Variable costs dominated by wood (75% of total), with electricity at 3% due to efficient production.

• Fixed costs increased mainly due to personnel and inflation; working capital rose by SEK 222 million over the last four quarters.

• Equity/assets ratio at 56% (down from 65%); net debt increased to 558 MSEK.

Outlook and guidance

• Cost-saving program expected to reduce fixed costs by SEK 35–40 million annually, with full effect in H2 2025.

• Signs of improved pulp wood market balance may lower input costs from Q2 onwards.

• Investment program largely completed; future CapEx to be limited to protect cash flow.

• Ongoing dialogue with lenders to secure long-term sustainable financing after leverage covenant breach.

• Focus on activating sales channels to recover volumes and reduce inventory.