Rottneros: Q2 Clean EBIT broadly inline – H2’23 will be challenging – ABG


• Clean EBIT SEK 57 vs. ABGSCe SEK 62m
• Q3 EBIT likely SEK -20-50m
• Conference call at 12 CET

Clean EBIT SEK 57m vs. ABGSCe SEK 62m
Clean EBIT was SEK 57m, which compares to our estimate of SEK 62m. Higher realised prices in SEK were offset by weaker volumes and higher costs. Rottneros booked provisions of SEK 16m in the quarter related to organisational changes at the Vallvik mill. Based on the restructuring efforts of both Vallvik Mill and Rottneros Mill, the employee count has been cut by ~20% in less than a year. Note that production was 13% higher than deliveries, which boosts EBIT through lower fixed costs. However, this effect was offset by inventory write-downs of roughly SEK 15m. EPS came in at SEK 0.22 vs. our estimate of SEK 0.31.

We had the following EBIT bridge in our estimates: We expected Q2 clean EBIT of SEK 62m, which compares to SEK 219m in Q2’22 and SEK 149m in Q1’23. The q-o-q effects are likely: SEK +10m from lower chemical costs, SEK +5m from FX, SEK -90m from lower pulp prices net of hedges, SEK -10m from higher wood costs and SEK -5m from higher personnel expenses. Thus, we arrived at Q2 clean EBIT of SEK ~60m.—h223-will-be-challenging.pdf

ABGSC Commissioned Research