COVID-19 impacts BillerudKorsnäs financials

Renewable packaging company BillerudKorsnäs has announced its financials for the 2020 fiscal year, revealing a decline in EBITDA.

Its adjusted EBITDA declined to SEK (Swedish krona) 568 million from SEK 618 million in 2019, which it said was negatively impacted by lower market prices and higher maintenance costs and positively impacted by lower fibre costs, and reduced negative KM7 ramp-up impact and cost savings.

These effects arose following COVID-19.

It also revealed that its net sales for the fourth quarter was almost unchanged and amounted to SEK 5.803 billion, from 5.815 billion in Q3. Excluding currency effects, it said its sales grew by two per cent.

The company’s president and CEO Christoph Michalski said BillerudKorsnäs delivered a “decent fourth quarter financial results” even though the year 2020 was an extraordinary period in which the coronavirus pandemic threatened people’s health, lives and livelihoods around the world.

“At BillerudKorsnäs, we have been relatively unscathed and are humbled by the resilience of our business and our employees’ ability to handle challenges and adapt to new working conditions,” he said.

“Reduced demand in some end-user markets has meant challenging market conditions, although our largest market segment, packaging material for food and beverages, has been resilient.”

Michalski said the outlook for 2021 is more promising.

“While the macro-economic outlook remains uncertain, we expect stable market conditions for most of our product segments and price improvements in selective segments in the first quarter. We also anticipate a recovery in liquid packaging board,” he said.

“Demand in some market segments, such as paper for medical and hygiene products and food service, is however expected to remain challenging. The total cost of fibre is expected to be unchanged in the first quarter.”

Michalski also mentioned that BillerudKorsnäs is “perfectly positioned” to capture values in the shift towards environmentally-friendly packaging and e-commerce.

“We are a leading provider of fibre packaging materials in attractive niches and offer innovative packaging solutions. The strength and purity of our materials means they are lightweight and have smaller environ-mental footprint than alternatives. We are taking a proactive lead on sustainability and have maintained our leading position in the containers and packaging category of the Dow Jones Sustainability Index,” he said.

“This position provides a good foundation for value creation, and our ambition is to increase growth and profitability.

“Our priorities for the current year are about further increasing customer satisfaction through our continual quality management work, progressing with the ramp-up of our new board machine at Gruvön to achieve increased production volumes and an improved sales mix, pursuing continued cost and efficiency measures, and securing a competitive wood supply.

“We will also initiate the investment in a new recovery boiler at Frövi. It will ensure continued long-term operation of this mill, improve environmental performance and provide opportunities for enhanced efficiency. The project is planned to be financed by cash flow from operating activities.”

Leave a comment:

Your email address will not be published. All fields are required