In a demanding and hesitant market, Moelven reported a satisfactory result in the third quarter, but margins have been significantly reduced.
The group reported revenues of NOK 2,774 million in the third quarter. This is a decline of NOK 342 million compared to the same period in 2022. The operating result in the third quarter was NOK 14 million, compared to NOK 229 million in the third quarter last year.
"In light of the demanding market situation, the result is satisfactory. But by and large, this is not something we are pleased with. In order to continue to develop the timber industry in the manner we want, we are dependent on a better operating margin," says CEO Morten Kristiansen.
He says that Moelven is currently experiencing a difficult climate.
"The increased costs in society result in lower profits on our products, which in turn makes it difficult to earn money. We don't know how long it will last," Kristiansen says.
Slowdown in the professional market
The companies in the Building Systems division, which manufactures glulam, building modules and office interiors, saw good activity in building, construction and infrastructure, as well as other smaller projects this quarter. They have nevertheless had to face the consequences of the uncertain outlook.
"We brought large projects with us into the slump, but as they are completed and fewer new projects are started, it has reduced our order backlog," the CEO says.
In the third quarter, the professional market in Scandinavia declined the most, as a result of fewer new construction projects being initiated. Due to uncertainty surrounding further economic developments, the Group had to notify 87 employees of Moelven Byggmodul AB and 25 employees of Moelven Töreboda AB of termination this autumn.
"It's painful to be the bearer of bad news to skilled employees, but we simply don't know if we have enough jobs for all our people going forward," Kristiansen says.
In the international export markets, demand for sawn wood products was satisfactory, but falling in the quarter. The same applies to the rehabilitation, conversion and extension market.
Preparing for the future
Despite the tough times, the CEO believes that the future of wood products is bright.
"Right now there's a slowdown in the market, but sooner or later it's going to turn. The great uncertainty is when that will happen. We are convinced that our climate-smart products and services will become more important than ever in the future," Kristiansen says.
He says that Moelven is spending the time during the slump to prepare for the future.
"We have a fundamental financial situation that enables us to implement the significant investment projects in Norway and Sweden that we have decided. When the market turns, we are ready to build a sustainable future using wood," the CEO says.