Financial Reports & Markets
BillerudKorsnäs Q1 impacted by earlier production problems
By P&PC Staff
By P&PC Staff
Apr. 11, 2017 – BillerudKorsnäs preliminary first quarter results have been negatively impacted by quality costs emanating from production during the second half of 2016 and start-up costs for the Rockhammar re-build late 2016. Despite these issues, BillerudKorsnäs explains it experienced a relatively good first quarter in its current fiscal year based on high production volumes. Operating profit for the first quarter is estimated to amount to approximately SEK 550 million ($81 million).
“It is both unexpected and frustrating that we have to take these one-off costs in an otherwise positive development,” said Per Lindberg, President & CEO of BillerudKorsnäs “Production is delivering to expectations. Production volumes were the highest ever in a single quarter, and sales, especially for consumer board, is showing better than anticipated growth. The market trends for packaging paper and corrugated solutions are also very strong at the moment so looking beyond these two issues it actually looks pretty good.”
The extra costs for the quality problem and the re-build amount to approximately SEK 80 million ($11.8 million). BillerudKorsnäs explains there is also a timing issue between Q1 and Q2 for costs related to the maintenance shutdown in Gruvön where approximately SEK 15 million ($2.2 million) more than previously guided is taken in Q1, this will reduce Q2 impact with SEK 10 million ($1.5 million) compared to previous guidance.
An additional SEK 10 million ($1.5 million) impacted the result negatively due to reassessment according to IAS16 and relates to costs for moving and education in the restructuring project in Skärblacka. This will impact the full-year results with approximately SEK 45 million ($6.6 million), according to BillerudKorsnäs, and hence reduce the capex with the same amount.