04 May 2007

Turnaround yields results

Norske Skog, first quarter 2007:
Input factors for newsprint and magazine paper production became more expensive in the first quarter of 2007, when Norske Skog paid 6-7 per cent more for recovered paper and pulpwood. At the same time, the company noted that its turnaround programme had a positive effect of roughly NOK 200 million on results for the period.
"The whole organisation is making a major effort to implement our extensive turnaround," says chief executive Christian Rynning-Tønnesen. "That's allowing us to respond to higher costs and a market which remains demanding."
Gross operating earnings before special items for the period totalled NOK 1 175 million, compared with NOK 1 267 million for the fourth quarter of 2006. Net operating earnings were NOK 440 million, compared with NOK 538 million in the previous three-month period. Compared with the first quarter of 2006, gross operating earnings rose by NOK 141 million. Fixed costs were substantially lower as a result of the restructuring of the mill portfolio, the turnaround and last year's rebuilds in Australasia.
Demand is expected to develop relatively well for the rest of the year, with the exception of the North American market.
The newsprint market in Europe remains good, with demand on a par with 2006. A significant slump in demand for newsprint in North America and overcapacity in China are affecting the European market through increased imports of newsprint from Canada and less scope for exports to Asia.
The full report for the first quarter can be accessed at www.norskeskog.com.
Oxenøen, 4 May 2007
Norske Skog
Corporate communications
Further information from:
Vice president corporate communications
Tom Bratlie
Tel: +47 67 59 93 34 or +47 90 52 19 04
Financial market:
Vice president investor relations
Jarle Langfjæran 
Tel: +47 67 59 93 38 or +47 90 97 84 34

Q107 Norske Skog BOD report and accounts