Rottneros: Strong delivery but the direction is down - ABG

Q1: EBIT SEK 149m vs. ABGSCe of SEK 90m
Chinese NBSK import price down ~20% YTD
Fair value range: SEK 10-15/sh


Q1: Better prices, better volumes

Clean EBIT in Q1 was SEK 149m vs. our estimate of SEK 90m and SEK 145m in Q1'22. The deviation to our estimate was mainly driven by higher realised prices/mix (+7%), better volumes (+3%) and higher production (+5%, positive effect through fixed costs). EPS came in at SEK 0.77 vs. our SEK 0.46 forecast. Q2 should be weaker than Q1 driven by lower pulp prices. Rotternos will likely book SEK 15-20m in one-off redundancy costs related to the 24 employees being laid off at the Vallvik mill in Q2. The company confirmed the SEK 180m investment to expand its CTMP production capacity from 125kt to 165kt and introduced a new SEK 86m investment into renewable energy, which will reduce purchased electricity by ~3 GWh. Following the closure of the groundwood line in Q4'22, Rottneros is taking another step away from declining product markets (paper) and expanding into growth categories (tissue, packaging etc.).

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/rottneros/Equity-research/2023/4/rottneros---strong-delivery-but-the-direction-is-down/