Rottneros: Strong end to an exceptional year - ABG

Q4e clean EBIT SEK 140m
Pulp prices down but market balance is tight
Fair value range: SEK 12-17/sh (10-15)


Q4e: EBIT SEK 140m

We expect Rottneros to finish off an exceptional year with another good quarter. Q3 clean EBIT was SEK 256m. The q-o-q effects are likely: SEK -65m from maintenance/volume/mix effects, SEK -30m from higher wood and chemical costs, SEK -15m from seasonally higher personnel costs and SEK -5m in net other effects. Thus, we arrive at Q4 clean EBIT of ~SEK 140m. Note that pulpwood and chemical costs are still on the rise, and we expect cost headwinds to persist in H1'23. The company closed the groundwood production line at the Rotternos mill from Q1 (~60kt with limited profit contribution), but will likely add 30kt of new CTMP capacity in the coming year. On estimates, we make minor adjustments to our '22e and '24e forecasts, but we lift our '23e expectations driven by higher pulp price assumptions.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/rottneros/Equity-research/2023/2/rottneros---strong-end-to-an-exceptional-year/