Rottneros (RROS) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales increased by 4% year-over-year to 711 MSEK, with EBIT reaching 30 MSEK, reflecting strong mechanical pulp output, robust European demand, and stable operations after a challenging start to the year.

• Production stabilized, with improved results over Q1 2024 and a new production record in mechanical pulp.

• Net income for Q2 was 22 MSEK, with EPS at 0.15 SEK.

• A serious workplace accident occurred in June at Rottneros Bruk, resulting in severe injuries.

Financial highlights

• Q2 2024 EBIT was 30 MSEK, down from 41 MSEK in Q2 2023, mainly due to negative price and currency effects and higher variable costs.

• Sales volume increased by 7% YoY, driven by strong CTMP production and sales.

• H1 2024 EBIT totaled 35 MSEK (190 MSEK in H1 2023), impacted by lagging sales prices and high variable costs.

• Investments in H1 totaled 216 MSEK, mainly for capacity expansion and renewable energy projects.

• Available liquidity at quarter-end was 298 MSEK; net debt position reached 112 MSEK.

Outlook and guidance

• All major investment projects are progressing as planned, with total 2024 CapEx expected at 430 MSEK.

• Market outlook remains positive, especially in Europe and North America, with continued demand for tissue and packaging grades.

• Expanded CTMP capacity and new solar energy installations to be operational in H2 2024.

• Ongoing investments in capacity and sustainability expected to support future growth.

• Expect normalization of product mix and improved profitability as production issues are resolved.