April 1, 2011
Net sales of the Myllykoski Group in 2010 was EUR 1,123 million, which is 7.3% less than in 2009 (EUR 1,212 million).
Operating loss for 2010 was EUR 49 million (loss EUR 18 million). Operating loss without non-recurring items was EUR 63 million (profit EUR 10 million).
Operating loss for October - December 2010 was EUR 34 million (loss EUR 55 million). Operating loss without non-recurring items for October - December 2010 was EUR 29 million (loss EUR 11 million).
The loss for the year 2010 was EUR 113 million (loss EUR 68 million). The loss without non-recurring items was EUR 70 million (loss EUR 7 million).
Operating cash flow in 2010 was EUR -22 million (EUR 153 million).
Low paper prices and high fibre prices decreased the profitability.
In March 2010, the main financiers agreed to extend Myllykoski’s financing until 31 March 2011. Myllykoski’s owners announced a sale of Myllykoski Corporation to UPM-Kymmene Corporation on 21 December 2010. At the same time a lock-up agreement was signed by Myllykoski’s main financiers, UPM-Kymmene Corporation and Myllykoski. The lock-up agreement extends Myllykoski’s existing senior financing until the closing of the deal with UPM and sets forth the rearrangements of such loans on the closing date.
In addition to the lock-up agreement Myllykoski and the main financiers are currently in good faith negotiations concerning a separate financing arrangement. This arrangement would include a longer term financing solution in case the deal with UPM is not approved by the competition authorities, and Myllykoski continues its operations independently. Further, the arrangement would contain a financing solution until the closing of the deal with UPM, including a solution regarding the capital loan notes due in May 2011. Even considering the uncertainty, the Board of Directors believes that the negotiations will be brought to a positive conclusion in the near future. For these reasons, the Board of Directors continues to adopt the going concern basis of accounting.
The prices of publication papers and especially newsprint are expected to rise. The prices of fibre raw materials are expected to remain high, and energy costs are expected to grow. Myllykoski is continuing its profit improvement and savings programmes, as well as its measures to reduce its net working capital, throughout the entire organisation.
MYLLYKOSKI is a family-owned international paper group with manufacturing in Finland, Germany and the United States and sales offices around the world. The Finnish roots of the parent company go back to 1892. MYLLYKOSKI products consist of wood-containing uncoated and coated publication papers, including newsprint. Customers include publishers, printers, and retailers worldwide.
MYLLYKOSKI is among the largest publication paper producers in the world.
MYLLYKOSKI operates seven paper mills with a total annual capacity of close to 3 million tonnes, including the alliance partner Rhein Papier GmbH. MYLLYKOSKI employs 2,700 people.
MYLLYKOSKI is known as a pioneer in using new technologies as well as recycled fibres for paper production. MYLLYKOSKI’s vision is to be the premier publication paper brand recognized for creativity and positive business solutions.