In a difficult market situation, Moelven has delivered a good half-year result, but margins are under increasing pressure.
The Group reported sales of NOK 7040 million in the first six months of the year. This is a decrease of NOK 1172 million compared to the same period in 2022. The operating profit for the first half of the year was NOK 343 million, compared to NOK 1629 million for the same period last year.
“We have left behind the record years following the pandemic and are now experiencing daily life that is more similar to the situation prior to 2020. In light of the difficult market situation we are currently in the midst of, we are pleased with the half-year results, but we expect the next six months to be characterised by even greater uncertainty,” says Morten Kristiansen, CEO of Moelven Industrier ASA.
Slowdown in consumption
Demand for sawn wood products declined during the first six months of the year, but still remained at a satisfactory level internationally. In the domestic markets of Scandinavia, activity in the building materials trade was low, and also far fewer new housing and holiday home projects are being initiated.
“Inflation, rising interest rates and increased costs in general in society are causing a decline in private consumption. People are being forced to prioritise what to spend their money on, and this also affects the sale of wood products,” Kristiansen says.
As a result of the sharp decline in the construction market, it was announced in May that Moelven Limtre AS was to close its branch in Agder, where 15 people will lose their jobs.
Overall, the companies in the Building Systems division, which, in addition to glulam, also manufacture building modules and office fittings, saw a good level of activity in projects within building, construction and infrastructure, as well as other smaller projects during the past six months.
Preparing for the future
The CEO says that these uncertain times are affecting the Group’s profits.
“The market is precipitous and unpredictable. Increased costs result in lower profits on our products and we are finding that our margins are under increasing pressure – throughout the value chain.”
Moelven is also continuing to work on the Group’s established long-term strategies.
“The market will always go up and down, but we are convinced that our climate-smart products and services are more important than ever. We are therefore continuing to prepare for the future, and are working both strategically and operationally to develop international competitiveness in everything we do,” Kristiansen says.
Long-awaited conclusion on Tretten Bridge
August saw the conclusion of the Norwegian Safety Investigation Authority’s investigation into the causes of the Tretten Bridge collapse. Moelven Limtre manufactured and installed the glulam for the bridge on behalf of the client. The design and dimensions were agreed prior to the order for Moelven. The report was clear that the glulam had nothing to do with the cause of the collapse.
“The conclusion was both long-awaited and expected. We are pleased that the wood and our glulam have been exonerated. We are now ready to look to the future and continue to build a sustainable future using wood,” Kristiansen concludes.