Norske Skog’s Australian operation finds itself in the red as it records a pre-tax loss of $12.9m for the 2014 financial year, despite starting to produce light-weight coated catalogue paper. The Norwegian paper manufacturer says demand for newsprint in Oceania decreased by 6 per cent in 2014, compared to 17 per cent in 2013. Demand for magazine paper in Oceania it says declined by 2 per cent last year.

Sven Ombudstvedt, CEO of Norske Skog

Norske Skog has three mills in Australia – Boyer, Tasman and Albury – that produced 626 thousand tonnes of paper, which was down 22.4 per cent due to falling demand for newsprint and magazines. The company expects a better 2015, however, with Australasian operating earnings increasing to $11.9m in fourth quarter, up from $7.6m in the third quarter, due to completion of the ramp-up at Boyer, lower fixed costs and seasonally higher sales volumes. The global figures for Norske Skog saw the company record a loss of $202m for the fourth quarter compared to $59.3m in the same period the year before. The paper maker’s global operating revenue for the fourth quarter was down $4.2m compared to last year from $459.3m to $416.7m. Norske Skog’s global EBITDA for the final 2014 quarter was also down some 40 per cent from $38.7m last year to $24.6m. Sven Ombudstvedt, president and CEO of Norske Skog says, “The market remains challenging, and we will continue our efforts to improve the group’s competitiveness and financial flexibility. “Export volumes for newsprint out of Australasia track international prices in Asia and is still expected to be challenging. The new magazine demand in Boyer should give a significantly positive contribution to gross operating earnings in 2015. “Last year the machine was a significant negative contributor due to a prolonged ramp-up.”

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