Rottneros: Large volume-driven beat in Q4 - ABG

Clean EBIT SEK 49m vs. ABGSCe SEK -28m
Q4 likely weaker than Q3
Conference call at 12 CET


Clean EBIT SEK 49m vs. ABGSCe SEK -28m

Clean EBIT was SEK 49m, which compares to our estimate of SEK -28m. The beat was driven by significantly higher volumes (delivered 102.3k tonnes vs 86.1k tonnes in Q2'23). Deliveries were 15% higher than production, driven by Rottneros' efforts to sell volumes within its selected niches, as well as the acquisition of new customers. Variable costs have also come down compared to H1'23. EPS came in at SEK 0.22 vs. our estimate of SEK -0.14.

We had the following EBIT bridge in our estimates: We expect Q3 clean EBIT of SEK -28m, down from SEK 57m in Q2'23 and SEK 149m in Q3'22. The main effects q-o-q are likely: SEK -90m from lower pulp prices (-9% NBSK and -23% BHKP), SEK +10m from FX, SEK +3m from pulp price hedges, SEK -5m from increased wood costs (higher prices in Sweden but less Baltic sourcing), SEK +5m from lower chemical and distribution costs (caustic soda price down ~17% q-o-q in Western Europe), SEK +12m from seasonally lower personnel expenses and SEK -20m in planned maintenance. We arrive at Q3 clean EBIT of ~SEK -28m. Q4 will be weaker than Q3 driven by more maintenance costs.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/rottneros/Equity-research/2023/10/rottneros---large-volume-driven-beat-in-q4/