Moelven CEO highlights 'strong finish' to 2013 with Q4 operating profit of 36M Norwegian kronor, up 69M year-over-year; company records 45M loss for 2013 but sees better balance between raw material and finished sawn timber prices in final quarter
January 24, 2014
– Moelven posted a NOK 36 million profit on the company's operations during the final quarter of the year, i.e. NOK 69 million more than for the same quarter last year.
The improvement in the result towards the end of the year is primarily due to better balance between raw material and finished goods prices for the group's undertakings operating in the sawn timber market. Operating income for the year finished at NOK 8,009 million (NOK 8122 million) and the operating result was minus NOK 45 million (17). For the year, the result after tax costs was minus NOK 93 million (minus 36).
Moelvens CEO Hans Rindal is more content with the conclusion of 2013 than he was the previous year.
“This is a strong finish for a year with poor earnings for Moelven. In terms of results, this is our best fourth quarter since 2009. Obviously, we are disappointed that the year as a whole finished with a negative result, but now we are seeing signs in many of our markets that things are picking up. At the same time we have improved efficiency internally in several areas,” Rindal says.
Rindal explains that in the course of the autumn of 2013, Moelven has seen an improvement in demand for sawn timber, including in certain European markets.
“England is one example of this. In Southern Europe the situation is still difficult with a slump in the construction market, but demand is no longer dropping. All in all, there is significantly better balance between supply and demand than for a long time,” Rindal says. At the same time, good demand continues in markets beyond Europe.
The CEO also notes that the Euro is stronger against SEK and NOK than previously.
“A strong Euro is related to a certain improvement in the European economy. This is important for our export income, but we must be prepared that this will not last. Proceeding with the ongoing improvement work is therefore essential. Should the currency situation last, it would of course be welcome,” says Rindal.
Lower stock levels and good order backlog
The building products division Wood has as usual seen lower activity around the turn of the year and will spend the time towards the peak season on stocking up.
“We have a good stock situation and good activity – considering the time of the year. For the Building Systems division the order backlog is somewhat better than usual for the time of the year. The composition of the order backlog is also better than it was at this time last year,” Rindal says.
We expect to see continued improvement in international market prices for sawn timber in the first quarter. Demand is increasing slowly, and producer stocks of finished goods are still at low levels. At the same time, the NOK and SEK exchange rates in relation to the most important export currencies of EUR, GBP and USD are at levels that provide a better basis for competition in the export markets than in a long time.
In the Scandinavian market, somewhat lower building activity is expected. However, the lion's share of the group's products are aimed at the renovation, rebuilding and extension markets, as well as the market for new commercial buildings, which are more stable than the residential housing market.
In sum, activity levels are expected to follow normal seasonal variations with increased activity as the first half of the year progresses.