Norske Skog's EBITDA in the second quarter of 2024 was NOK 471 million, an
increase from NOK 76 million in the first quarter of 2024. The second quarter
EBITDA was positively impacted by insurance at Norske Skog Saugbrugs of NOK 338
million. Despite signs of positive developments in the publication and
containerboard markets, closures are still required. The process to deliver a
main study on the BCTMP-production project (bleached chemi-thermomechanical
pulp) at Saugbrugs has started. 

" - We are receiving excellent feedback from our customers on our containerboard
product quality, which is promising for our plan to deliver a total of 760 000
tonnes of packaging paper from Bruck and Golbey into the market in the coming
years. In the quarter, we launched plans to start BCTMP-production at Saugbrugs.
This will secure jobs and further strengthen the competitiveness of Saugbrugs.
Despite declining markets and reduced machine capacities, we are very pleased to
have achieved an increased market share with higher sales volumes in the second
quarter of 2024 compared to the same quarter last year. This means that Norske
Skog's market position with the paper industry has been strengthened," says Geir
Drangsland, CEO of Norske Skog.

Cash flow from operations was NOK 299 million in the quarter compared to NOK -69
million in the previous quarter. The second quarter cash flow was positively
influenced by somewhat higher sales prices and -volumes, and a decrease in
working capital due CO2 related proceeds. Operating earnings in the second
quarter of 2024 were NOK 364 million compared to operating earnings in the first
quarter of 2024 of NOK -177 million. The operating earnings in the quarter were
affected by insurance at Norske Skog Saugbrugs of NOK 338 million, non-cash
changes in fair value of energy contracts in Norway amounting to NOK 44 million
and depreciation of NOK 128 million. 

Profit before tax in the quarter was NOK 311 million compared to loss before tax
of NOK -382 million in the previous quarter. Net interest-bearing debt decreased
from NOK 3 246 to 2 970 million at the end of the quarter in part due to
favourable working capital changes. The equity ratio was 40%. During the
quarter, Norske Skog refinanced the EUR 150 million secured bond with a
five-year NOK 1 400 million unsecured bond at a lower interest rate.

" - It is great to see that the long-term refinancing of the group with a new
NOK 1.4 billion bond has been completed at a lower interest rate and lower
amount than the previous bond. The previous bond was secured, whereas the new
one is unsecured, which makes the refinancing even more impressive," says Geir
Drangsland, CEO of Norske Skog. 


Operations
Total annual publication paper production capacity for the group is 1.6 million,
with 1.3 million tonnes in Europe and 0.3 million tonnes in Australia. Norske
Skog Bruck (PM3) started production of recycled containerboard paper in first
quarter of 2023, and Norske Skog Golbey (PM1) plans to start in the second half
of 2024. Norske Skog will after the ramp-up of Norske Skog Bruck and Norske Skog
Golbey have an annual capacity of 760 000 tonnes of packaging paper production. 

According to Euro Graph, demand for standard newsprint in Europe decreased by 1%
through May 2024 compared to the same period last year. SC magazine demand
decreased by around 11%. LWC paper demand decreased by around 1% through May
2024 compared to the same period last year. According to PPPC trade statistics
for Australia, demand for newsprint and coated mechanical decreased by 33% and
2%, respectively, through May 2024 compared to the same period last year. 


Publication paper
Operating income increased from the previous quarter mainly due to the
recognition of NOK 338 million in insurance at Norske Skog Saugbrugs in the
quarter, and slightly higher sales prices and sales volumes due to geographic
and product mix effects. Despite positive demand sentiment in certain segments
of the publication paper market, there is still a market imbalance for
publication paper. 

Variable costs per tonne increased in the quarter, both in absolute terms and
per tonne for cost of materials mainly caused by higher recovered paper prices.
Distribution costs increased slightly in the quarter. Fixed costs both in
absolute terms and per tonne decreased somewhat in the quarter due to lower
costs and production volumes. Group capacity utilisation was 88% in the quarter,
87% in Europe and 90% in Australasia.


Packaging paper
The packaging paper machine at Bruck is operating according to the ramp-up plan.
The containerboard production will reach full capacity utilisation in the second
half of 2025. The operating income for the second quarter was higher than the
mill gate cash costs. The EBITDA was slightly positive due to higher sales
prices and delivered volume.


Key figures, second quarter of 2024
NOK million (unless otherwise stated)	
                        Q224	Q124	Q223	YTD24	YTD23
Income statement	 	 	 	 	 
Total operating income	3 217	2 688	3 404	5 905	6 725
EBITDA	                  471	   76	  380	  546	1 055
Operating earnings	  364	 -177	  146	  187	  231
Profit before tax	  311	 -382	   41	  -71	 -108
 	 	 	 	 	 
EBITDA margin %	         14.6	  2.8	 11.2	  9.3	 15.7
Capacity utilisation publication paper %	
                           88	   86	   77	   87	   78
					
Cash flow					
Net cash flow from operating activities	
                          299	  -69	  353	  229	  783
Net cash flow from investing activities	
                         -104	 -377	 -695	 -482  -1 063

Balance	               30.06.24	   31.03.24     30.06.23
Total assets	         15 201	     14 644	  14 689
Equity	                  6 138	      6 004	   6 208
Equity %	             40	         41	      42



Status projects

Norske Skog Golbey conversion projects
At Norske Skog Golbey, the conversion of the newsprint paper machine (PM1) into
recycled containerboard paper production is progressing towards start-up in the
second half of 2024. Norske Skog Golbey will eventually add 550 000 tonnes of
new low-emission packaging paper capacity after ramp-up is completed, which will
be fully based on recycled fibre. Golbey PM1 will utilise renewable energy
generated from the biomass plant under construction at the Golbey industrial
site (Green Valley Energie). 

Norske Skog Skogn new TMP-line
Norske Skog Skogn successfully started the production at the net NOK 180 million
new thermo-mechanical pulp (TMP) line, which substitutes recovered paper with
fresh fibre. The project was completed according to budget and timeline. The
total cost of the purchased machinery and equipment were about 50-70% below
standard new equipment. The new TMP line will reduce variable costs, in addition
to reducing NOx emissions, fossil CO2-emissions and waste sent to landfill. 

" - I would like to thank everyone who has been involved with the project for
their efforts and excellent work, especially the employees and not least to all
our partners who have delivered according to expectations. This project will
give us a boost both on the cost and environmental side, but not least it will
give a boost in what we offer our customers. The feedback from our largest
customers has so far been outstanding. We now offer paper produced only on fresh
fibre from Skogn. This investment will clearly strengthen our position in the
paper market," says Geir Drangsland, CEO of Norske Skog. 

Norske Skog Saugbrugs BCTMP-production
Norske Skog will initiate a main study aiming to enter the bleached
chemi-thermomechanical pulp (BCTMP) market by starting production at Norske Skog
Saugbrugs in Halden. The new BCTMP line will produce approximately 300 000 tons
of competitive pulp to meet the growing demand, especially for products in the
packaging market. The BCTMP production will be based on fresh fibre, and the
mill already has access to adequate energy capacity. Norske Skog Saugbrugs
investment will exploit existing machinery, equipment, and infrastructure