05 Nov 2003

Norske Skog: Earnings up, despite lower prices

Despite lower prices, Norske Skog has improved its operating earnings in Q3 by NOK 60 million, compared with the same period last year. Operating earnings reached NOK 372 million. - The improvement is due, among other things, to lower costs per produced tonne, increased volumes and a beneficial effect from a somewhat weaker Norwegian krone, says CEO Jan Reinås.

The Improvement 2003 programme boosted earnings by NOK 610 million, compared with the base year 2002. The programme's goal is to increase earnings by NOK 2 billion by the end of 2004.
-We will achieve that goal. I am impressed by the efforts that have been made at all levels in the Company. This is taking us forward, and Norske Skog has become more competitive. In addition, it must be emphasised how important it is for the Norwegian authorities to pursue policies that stabilise the krone vis à vis the Euro, adds Reinås. He sees indications that the newsprint and magazine paper markets have bottomed out, but it is uncertain how rapidly demand will improve. Moreover, there are wide variations among Norske Skog's market areas.
The global newsprint market showed no significant change during Q3. Worldwide, demand is still low. Norske Skog's total deliveries so far this year are just over 3 per cent higher than in the same period last year.
Norske Skog's financial position is satisfactory. The ratio between equity capital and debt has improved to 0.95, from 1.02 at the turn of the year. Operating revenue reached NOK 6,115 million in Q3 - up NOK 300 million from the same period last year. The after-tax result in Q3 was NOK 45 million, compared with NOK 182 million in the same quarter last year. Last year, NOK 250 million was booked as income from outstanding tax matters related to acquisitions.
On September 30, Norske Skog took up a bond loan totalling USD 400 million. The loan consists of two tranches, of which one falls due in 2015 and the other in 2033. Through swap agreements, both loans have been switched to floating interest terms with very competitive margins. The loan attracted great interest, and it ensures continued satisfactory financial flexibility.
For further details about the Q3 result please see www.norske-skog.com
Oxenøen, November 5, 2003
Corporate Communication and External Relations
The Board of Directors report with tables can be downloaded from the enclosed link.

Board of Directors report incl. figures

For additional information, please contact:
Media: Senior Vice President Hanne Aaberg, +47 67 59 90 29 / +47 913 51 681
Financial market: Vice President Jarle Langfjæran, +47 67 59 93 38 / +47 909 78 434