Moelven had a profit of NOK 114 million on operations in the third quarter. The figure is approximately NOK 20 million more than in the same quarter last year.
The company’s operating revenues totalled NOK 1,886 million (1,521) in the third quarter. Operating revenues and profit for the first three quarters of the year totalled NOK 5,299 million (4,749) and NOK 278 mill (29), respectively.
The third quarter has, as usual, been a period of seasonally solid demand for the Group’s products and services. Demand has been good for sawn wood produced both by the sawmills in the Timber division, and by the combined sawmill and planing units in the Wood division.
President and CEO Hans Rindal is pleased.
- We’ve had a good quarter at Moelven. Demand for many of our products has been solid both in Norway and in Sweden. The companies in the Building Systems division, which depend largely on different sized construction projects in Scandinavia, receive a large part of their deliveries late in the project cycle, and are therefore often the last companies in the Group to benefit from a growing demand. But also this division is now registering increased activity in many areas, reports Mr. Rindal.
COST-ADJUSTING MEASURES HAVE BEEN IMPLEMENTED
The President and CEO explains further that the result is perhaps even better than the current market conditions would justify. The reason for the higher result, Mr. Rindal explains, is that the cost-cutting measures implemented in 2008 and 2009 have made Moelven more competitive.
- The positive results also provide a basis on which we can increase the investment pace again, and we are now back at a normal investment level. In addition we have invested in the acquisition of three new businesses in the second quarter - Granvin Bruk AS, Sør-Tre Bruk AS and Eco Timber AS. These investments should provide us with the broader market position we have desired, says Mr. Rindal.
Due to normal seasonal variations in construction activity, Moelven expects a normal slowing down of business activity in the fourth quarter. This coincides with the increased production of industrial timber in the Nordic market a development that is expected to give lower prices in several markets. All of these factors combined with an increase in sawlog prices in 2010 should lead to significantly lower margins for the industrial goods division, Timber, in the fourth quarter and the start of 2011.
The building products division, Wood, experience less market fluctuations, and normal seasonal changes in demand can be expected to be the primary factor influencing earnings figures in the fourth quarter.
The project-related division, Building Systems, has registered increasing market activity, primarily in the Swedish market. The start-up of new projects and the time it takes through to completion means that the division can expect an increased order backlog this winter, even though there is some uncertainty associated with the situation for the individual production unit.