Moelven had a strong first quarter, but uncertainty remains.
The group reported revenues of NOK 3,573 million in the first quarter. This is a decline of NOK 372 million compared to the same period in 2022. The operating results in the first quarter was NOK 129 million. This is one of the best Q1 results in Moelven’s history, even though it is below the record results of NOK 732 million in the first quarter of last year.
There are a number of reasons as to why Moelven has seen strong results in the first quarter. The Building Systems Division, which produces glulam, building modules and office fittings, is doing significantly better compared to the same time last year. The international market for sawn timber, or sawn wood products, has also contributed significantly the results. The same applies to the Swedish part of the Wood Division. Moelven has a strong position within board production, and this part of the business is experiencing a strong upturn in a Scandinavian construction market which is otherwise characterised by a downturn and low activity.
“Private consumers in Scandinavia are an important driver in the market. Many are now feeling that increased costs across the board means that they need to focus on different priorities. This means that private consumption is decreasing and people are buying fewer wood products,” says Morten Kristiansen, Group CEO of Moelven Industrier ASA.
Unclear future outlook
The Group CEO explains that it is more difficult than ever to predict future economic developments.
“We have talked about the uncertainty which has prevailed since the pandemic and we have warned that we are facing challenging times. The outlook for the future has by no means become clearer, but we are convinced that climate-smart products and services are more important than ever. It is great to see that major players such as Elgiganten are choosing glulam for the construction of one of the Nordic region’s largest warehouse and logistics facilities in Jönköping.”
Prices for wood products are still at historically high levels, but increased costs are nevertheless resulting in lower profits for Moelven’s products.
“We are now seeing major differences within the group. Our export divisions are benefiting from historically weak Norwegian and Swedish currencies, while our companies aimed at the domestic market are seeing tougher times as a result of a steep downturn in the construction market. This has made itself clear through cutbacks in building module operations in Norway and Sweden, as well as the ongoing lay-offs in the Moelven Limtre division in Agder,” says Kristiansen.
Continuing to invest
The Group CEO points out that, after two good years, Moelven as a whole is in a strong financial position.
“We are continuing to work on our established long-term strategies. We are now investing a new and more energy-efficient dryers at several of our plants in Norway and Sweden. This strengthens the competitiveness and future of our important cornerstone businesses in Biri, Braskereidfoss and Torsby. We are also expanding capacity and modernising extensively in Edane and Karlskoga. A new pellet factory, modelled on our factory at Sokna, will also be built in Karlskoga to increase local value creation from the residual raw materials from our sawmills in Värmland,” says Kristiansen, adding,
“These are important and major steps for the future and a clear signal that we at Moelven will continue to do what we can to build a sustainable future using wood.”
Read the quarterly report for Q1 2023 here.