BillerudKorsnäs expects negative impacts for the company’s first quarter results from emanating from production during the second half of 2016 and start-up costs for the Rockhammar re-build late 2016.
According to the announcement, the extra costs for the quality problem and the re-build amount to approximately SEK 80 million (around USD 8.8 million). Also, the company sees a timing issue between Q1 and Q2 for costs related to the maintenance shutdown in Gruvön where approximately SEK 15 million more than previously guided is taken in Q1, this will reduce Q2 impact with SEK 10 million compared to previous guidance. Additional SEK 10 million impact the result negatively due to reassessment according to IAS16 and relates to costs for moving and education in the restructuring project in Skärblacka. This will impact the full-year results with approximately SEK 45 million and hence reduce the capex with the same amount.
Per Lindberg, President and CEO, commented:
“It is both unexpected and frustrating that we have to take these one-off costs in an otherwise positive development. Production is delivering to expectations. Production volumes were the highest ever in a single quarter, and sales, especially for Consumer Board, is showing better than anticipated growth. The market trends for Packaging Paper and Corrugated Solutions are also very strong at the moment so looking beyond these two issues it actually looks pretty good.”
In 4Q2016 BillerudKorsnäs decreased profitability amid higher sales.
Earlier European Commission was inspecting BillerudKorsnäs to check compliance with EU competition rules.
The company is one of the leading manufacturers of packaging paper made from virgin fibers. It is headquartered in Solna, Sweden and emerged in 2012 from the merger of Billerud and Korsnäs and Voith Paper is a division of the Voith Group.