Norske Skog

Norske Skog increased its total deliveries by 5.4 per cent in the first nine months of 2004. Operating revenues for the third quarter increased by 4.5 per cent to NOK 6.4 billion from the same period of 2003. Third-quarter operating earnings were NOK 217 million, compared with NOK 372 million in the same period of last year. Net earnings in the third quarter were NOK 142 million, an increase of NOK 45 million from the third quarter of 2003.

"Operating earnings remain unsatisfactory," says CEO Jan Oksum. However, he emphasises that an improving world economy and growing advertising volumes are supporting a good consumption development. Capacity expansion is also limited on a global basis.

"Against that background, we expect a substantial increase in European prices for newsprint and magazine paper in 2005," Mr Oksum concludes.

"Demand is likely to be good going forward. While the development of the Norwegian krone is a source of uncertainty, we have hedged the bulk of our cash flow on a 12-month horizon. Currency changes will have a limited effect on net earnings within this time frame."

The company's Improvement 2003 programme achieved improvements of NOK 524 million in the third quarter compared with the 2002 base year, corresponding to NOK 2.1 billion on an annual basis.

Norske Skog's financial position is good, with NOK 7.1 billion in liquid reserves at 30 September. These consist of long-term drawing rights and bank deposits/short-term placements. The ratio between net interest-bearing debt and equity at 30 September was 0.9, which is in line with the target. Cash flow from operations and financing was NOK 507 million in the third quarter and just over NOK 2 billion for the first nine months.