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Article Excerpt
OPERATOR: Good afternoon, ladies and gentlemen, and welcome to the Holmen Interim Report January to September 2008 Conference Call. The presentation will be followed by a question-and-answer session from the telephone lines. (Operator Instructions). And just to remind you all, this conference call is being recorded.
I would now like to hand over to the chairperson, Mr. Magnus Hall, CEO. Please begin your meeting and I will be standing by.
MAGNUS HALL, PRESIDENT, CEO, HOLMEN: Thank you very much and welcome, everybody, to this interim report, January to September, for Holmen. Together with me, I also have Anders Almgren, the CEO -- CFO of Holmen, and we together will try to answer hopefully all the questions you may have.
There is some material and we start with picture number 4, showing operating profit development for Holmen before nonrecurring items. And you can see that during the first nine months of this year, we have a result which is considerably lower than last year, landing on SEK1.128 billion. And of course, it's the lower prices for newsprint, but also, increased cost of wood and other import goods during the year that has made this change.
If we go to the Quarter three, slightly better than Quarter two. Normally, we do have a stronger Quarter three due to seasonally lower personnel and maintenance costs, but also, here, we have experienced some increased raw material costs, making the difference between the quarters a little bit lower than normal.
We go to picture number 5, we start with Holmen Paper, where we can see that we have about -- the profit is about half of last year. We have kept volumes rather well. They are slightly up by roughly 1%. And we also had some maintenance stops last year which we didn't have this year that improved our situation generally. But lower prices and the increased cost, as mentioned before, have made the result to be about half. And we can see, also, in Quarter three, where we had a slightly lower result than in Quarter two, and it's mainly due to increased raw material costs.
Coming to picture number 7 -- picture number 6, I'm very sorry. The closedown of the Wargons Mill -- we have in this quarter two big activities. One is to close down the Wargons Mill, but the other activity is to close down, and we have already done so by -- just roughly a week ago, we closed one of our paper machines in our Hallsta Mill, taking away an annual production of roughly 110,000 tons of newsprint. And we did take a one-off cost for that in the second quarter and now, in the third quarter, we are taking a one-off cost for the Wargons Mill closure at SEK298 million.
There will be -- going forward, in the fourth quarter, there will be some effects. They are difficult to quantify, but there will be some effect due to the fact that we are doing these two closures, which are on top of these one-off costs, and they will put some pressure on the result in quarter four for Holmen Paper.
We go to picture number 7, which is the market development for newsprint, deliveries to Europe in this picture. In the last month of September, it bounced back after a rather weak August and we land on a little bit more than 2.5% decrease for the whole of this year in Europe, whereas exports...
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