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Paper manufacturer Norske Skog has revealed that it produced and sold a greater quantity of paper in 2003 than in 2002, but that substantially lower prices yielded operating earnings of NOK1.4bn in 2003, a decline of roughly NOK500m compared with 2002.
Net earnings for 2003 came to NOK402m. Gross operating revenue for Norske Skog came to NOK24.1bn as against NOK23.5bn in 2002. Cash flow from operations totalled almost NOK 3bn compared with NOK3.7bn in 2002.On a positive note, the company’s Improvement 2003 programme is yielding the expected results, and had an effect for the year of NOK955m before tax.
The board has proposed an unchanged dividend of NOK 6 per share.
Jan Oksum, Norske Skog president and CEO, says, "Even in a year characterised by weak markets, we maintained strong operating margins by comparison with our competitors and a solid financial position.
"This primarily reflects the results of our improvement programme and better exchange rate trends compared with 2002. We are due to reach the target for the improvement programme by the end of 2004, with a lasting effect of NOK2bn 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 during 2003 by seven to 11 per cent for newsprint and about three per cent for magazine paper.
Australian prices fell by three-four per cent, and South Korea also experienced some decline. Otherwise, prices in North America and Asia spot prices improved slightly. Demand is expected to increase in Asia and South America, and the Australasian market should remain positive and stable.
