Moelven delivers a good third quarter, but warns that the time ahead will be challenging. “The market has changed, electricity costs are rising and times are uncertain,” says CEO Morten Kristiansen of Moelven.
The group reported revenues of NOK 3,116 million in the third quarter, 2022. This is a decline of NOK 835 million compared to the same period in 2021. The operating result in the third quarter was NOK 229 million compared to NOK 1,143 million in the third quarter last year.
From strong international demand earlier in the year, the international market for wood products is now far more hesitant. At the same time, the consumer market in Scandinavia is characterised by poor demand for the products sold through the building products trade.
For Moelven, electricity costs have dramatically increased and in the fourth quarter the spot market forecast is more than NOK 135 million higher than at the same time last year. This constitutes in excess of NOK 2.5 million more for every production day.
“The contrast from last year is huge. Now there is lower demand, inventories are increasing, and with the increased costs this mandates completely different measures,” Kristiansen explains.
For the timber-consuming units in Moelven this means downscaling production in the fourth quarter.
“Unfortunately, we have no other choice but to reduce production at our sawmills and planing mills. For some of the units, the reduction can approach 20 per cent. This requires cost adjustments. We will use some of the available capacity for competence development and other tasks,” Kristiansen says.
Earlier this autumn Moelven Byggmodul AS announced that 80 people could be laid off as a result of low order volumes in the housing segment. Half of these have found temporary work in other Moelven companies.
The future will be built using wood
The CEO doesn’t hide the fact that large parts of the group are experiencing a more demanding market situation, but he doesn’t believe that wood as a climate-smart building material will lose ground.
“The future is uncertain, but it will likely be built of wood. Our glulam companies are getting more and more both small and large projects. Our Swedish module company also has a healthy backlog going forward.“
“Moelven benefits from being a large enterprise where economic cycles affect us in different ways and at different times,” Kristiansen concludes.