Despite overall weak market last year for Norske Skog, the producer of publication paper from Norway who owns 50-percent share in Singapore’s Pan Asia Paper Co., Pte Ltd and a 34-percent stake Malaysian Newsprint Industries Sdn Bhd in Malaysia, expects the demand in Asia to increase and is ready to meet new growth in all parts of the world, the company states in its press release dated February 5, 2004.
Last year, Norske Skog produced and sold a greater quantity of paper than in 2002 despite more difficult markets. Substantially lower prices have yielded operating earnings of NOK 1.4 billion last year, a decline of approximately NOK 500 million compared to 2002.
Net earnings for 2003 came to NOK 402 million. The company says its improvement programme is yielding the expected results, and had an effect for the year of NOK 955 million before tax.
Gross operating revenue for Norske Skog came to NOK 24.1 billion as against NOK 23.5 billion in 2002. Cash flow from operations totalled almost NOK 3 billion compared with NOK 3.7 billion in 2002.
“Even in a year characterised by weak markets, we maintained strong operating margins by comparison with our competitors and a solid financial position,” says Jan Oksum, Norske Skog’s president and CEO.
“This primarily reflects the results of our improvement programme and better exchange rate trends compared with 2002,” he continues, adding that the company is due to reach the target for its improvement programme by the end of 2004 with a lasting effect of NOK 2 billion compared with 2002.
“We’re well equipped to meet new growth in all parts of the world, but are uncertain when markets in Europe and North America will start to pick up. Strict cost discipline remains necessary to improve the company’s profitability.”
Prices in Europe, Norske Skog’s biggest market, declined 7-11 percent for newsprint and about 3 percent for magazine paper last year. Australian prices fell 3-4 percent, and South Korea also experienced some decline. Otherwise, prices in North America and Asia spot prices improved slightly.
European prices are marginally lower in early 2004 than in 2003, while further price rises have been announced in North America.
Demand is expected to increase in Asia and South America, and the Australasian market should remain positive and stable, the company says.