The Group's operating result for the third quarter dropped by 17.4 per cent to NOK 66 million, compared to NOK 80 million for the corresponding period in 2015.

CEO Morten Kristiansen of Moelven Industrier ASA says that the decline in operating result for the year's third quarter is primarily due to reduced earnings in the interiors and module operations. 

Tough market in western Norway

“It is particularly the interiors business Moelven Modus that is experiencing a tough market in Norway. This is specially noticeable in western and south-west Norway, which have been hit hard by dramatic cutbacks in the petroleum sector. There are indications in the market that the bottom may have been reached,” Kristiansen says.

On the other hand, interiors operations in Sweden are doing very well.  

Year to date increase

So far this year Moelven has earned NOK 271 million on operations. The cumulative operating result has thus increased by 23.5 per cent compared to 2015. 

“We are performing better cumulatively than the previous year. This is due to a combination of good conditions in most of our markets and good operating conditions at most of Moelven's units. We're clearly seeing the results of the long-term rationalization work we are carrying out in our operations,” Kristiansen says.

Efficient operations

He explains that several units have improved their efficiency through ongoing improvement efforts.

“However, there are still units with poor results. Improvement work will continue unabated in order to bring all units up to acceptable profitability levels. It should be mentioned that our two largest sawmills in Sweden – Moelven Valåsen AB and Moelven Notnäs AB – are planning investments of around SEK 160 million in machinery and equipment through a joint project. The plan is to be concluded in the summer of 2019. We aim for these units to become Moelven's most efficient and profitable,” Morten Kristiansen says.

Increased revenue

Operating revenue in the third quarter increased by 4.2 per cent to NOK 2,359 million (NOK 2,263 million in the corresponding period last year). Year-to-date operating revenues have increased by 9.5 per cent to NOK 7,894 million (7,207 million).

“The quarter has been characterized by satisfactory demand for products from the group's timber processing operations and a good level of activity in the Building Systems division that comprises the glulam, building module and interior businesses,” Kristiansen says.

Promising outlook

The Group's composition, with divisions that experience different impacts from economic fluctuations and units that operate in different markets, provides the Group with a good starting point for further improvements. 

“Overall, the result for 2016 is expected to be somewhat better than for 2015. The group has a long-term goal of a return on capital employed of 13 per cent. We have sufficient long-term access to liquidity to implement the restructuring and improvement projects required to achieve this goal.