President and CEO Hans Rindal attributes the results to the fact that there were few operational interruptions during the period, which has contributed, in combination with our continuous improvement work, to a positive development in the processing costs.
"The raw material costs also declined somewhat compared with last year. Overall, however, this does not compensate in full for the falling finished good prices in certain market segments, and the overall operating result for the quarter is lower than the same period last year. I am nevertheless satisfied that we have a positive operating result in all three divisions for the quarter – even in areas where the market conditions are the most challenging," says Rindal.
Moelven's CEO explains that the company has experienced a normal seasonal improvement in demand in many markets.
"This is most noticeable in the building materials division Wood. The level of activity, particularly in Norway, but also in Sweden to some extent, is exceptional in Europe. In other markets, we can really feel the financial uncertainty. The closest market in this context is Denmark," says Rindal.
Disadvantages of a weak euro
The export industry must apparently pay a price for having sound finances in its home country. The majority of Moelven's exports are from Swedish sawmills, which are feeling that their competitors are benefitting from a weak euro at present. Moelven's Norwegian units compete to a greater extent on their home market, but they are feeling a heightened interest by foreign entities to sell on the Norwegian market. This is also driven in part by a strong currency over a long period of time.
Acceptable in the project markets
For the project-oriented companies in Moelven's Building Systems Division, the level of activity in the Swedish market has declined somewhat, and some of our customers have become more hesitant in the second quarter. In Norway the level of activity in Building Interior Solutions has been favourable, while there has been a normal level of activity in the other companies.
"We have a profit, but it should be larger. We therefore have problems to tackle after the summer holidays, and we will," Rindal concludes.
Our performance in 2012 has been somewhat weaker than the primary scenario that was assumed at the start of the year. Europe is marked greatly by the debt crisis and poor economic performance.
We do not expect any increase in demand for industrial wood in Europe in the near future. However, positive signals from other areas such as the Middle East, North Africa and the US, indicate that we can expect an improvement in the international market balance for industrial wood.
For the Wood companies, the level of activity in Norway and Sweden is expected to remain at an acceptable level, particularly within the RME segment. The order backlog for Building Systems ensures a normal and good level of activity in the second half of the year.
Overall, the Board expects the Group's profit for 2012 to be better than in 2011.
For further information please contact:
CEO Hans Rindal, +47 906 96 910
Financial Director Morten Sveiverud, +47 909 80 667
Ass. Financial Director Rune F. Andersen, +47 913 43 260
Communications and HR Director Kristin Bjørnstad, +47 907 13 701
Communications Consultant Tom Erik Holmlund, +47 916 68 668