Arctic Paper - Still challenging
20 februari, 18:30
|
Q4 Paper EBIT of ~PLN 13.2mArctic Paper delivered Q4 Paper EBIT of ~PLN 13.2m, compared to our estimate of PLN 25m. However, note that the reported figure included an energy refund of ~PLN 40m, i.e clean Paper EBIT was PLN -27m vs. our clean estimate of PLN -14m. Weak demand and increased Asian competition have put pressure on prices, which impacted the Paper profitability. An announced 8-10 percent paper price increase aims to restore margins, though H1 2026 demand visibility remains weak. Pulp EBITDA was somewhat softer than expected at PLN -74m vs. our estimate of PLN -70m. Regarding the pulp business, the quarter was characterised by lower pulp prices in USD combined with a stronger SEK, as well as high wood costs. A write-down of finished goods inventory linked to lower pulp prices weighed on earnings by ~SEK -35m. In addition, the annual maintenance shutdown at Vallvik Mill impacted results by ~SEK 70-80m. Lower wood costs ahead, but markets still challengingPulpwood prices are dropping 25-30% across Scandinavia as high inventories and low demand pressure the market. This should provide some cost relief. Paper markets are helped by 10% supply cuts in '25-'26e, but with (too) low demand the utilisation rate is only 75-80%. We need 3mt more cuts to reach the historical average. The pulp market has had its short-term issues, but Suzano has hiked hardwood prices seven times, or +26%. Rottneros' exposure mainly lies within softwood and CTMP, which has lagged hardwood. However, SCA's recent USD 100/t NBSK price hike is good news for Rottneros, which could also see prices up in '26. Fair value range of SEK 17-50The company is trading at an EV/CE multiple of ~0.45x, which is ~40% below its historical average. We have applied three valuation methodologies and arrive at a fair value range of SEK 17-50. |
Läsaren av innehållet kan anta att ABG Sundal Collier har erhållit eller kommer att erhålla betalning för utförandet av finansiella företagstjänster från bolaget. Ersättningen är på förhand avtalad och är inte beroende av innehållet.
Ämnen i artikeln
Arctic Paper - Still challenging
20 februari, 18:30
|
Q4 Paper EBIT of ~PLN 13.2mArctic Paper delivered Q4 Paper EBIT of ~PLN 13.2m, compared to our estimate of PLN 25m. However, note that the reported figure included an energy refund of ~PLN 40m, i.e clean Paper EBIT was PLN -27m vs. our clean estimate of PLN -14m. Weak demand and increased Asian competition have put pressure on prices, which impacted the Paper profitability. An announced 8-10 percent paper price increase aims to restore margins, though H1 2026 demand visibility remains weak. Pulp EBITDA was somewhat softer than expected at PLN -74m vs. our estimate of PLN -70m. Regarding the pulp business, the quarter was characterised by lower pulp prices in USD combined with a stronger SEK, as well as high wood costs. A write-down of finished goods inventory linked to lower pulp prices weighed on earnings by ~SEK -35m. In addition, the annual maintenance shutdown at Vallvik Mill impacted results by ~SEK 70-80m. Lower wood costs ahead, but markets still challengingPulpwood prices are dropping 25-30% across Scandinavia as high inventories and low demand pressure the market. This should provide some cost relief. Paper markets are helped by 10% supply cuts in '25-'26e, but with (too) low demand the utilisation rate is only 75-80%. We need 3mt more cuts to reach the historical average. The pulp market has had its short-term issues, but Suzano has hiked hardwood prices seven times, or +26%. Rottneros' exposure mainly lies within softwood and CTMP, which has lagged hardwood. However, SCA's recent USD 100/t NBSK price hike is good news for Rottneros, which could also see prices up in '26. Fair value range of SEK 17-50The company is trading at an EV/CE multiple of ~0.45x, which is ~40% below its historical average. We have applied three valuation methodologies and arrive at a fair value range of SEK 17-50. |
Läsaren av innehållet kan anta att ABG Sundal Collier har erhållit eller kommer att erhålla betalning för utförandet av finansiella företagstjänster från bolaget. Ersättningen är på förhand avtalad och är inte beroende av innehållet.
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