Billerud Sees 13% Net Sales Decline In Q2 2023
Pulp and paper manufacturer Billerud faced a 13% year-on-year decline in net sales, amounting to SEK 9.95 billion (€860 billion) in the second quarter of its financial year.
The company attributed this decline in performance to lower sales volumes of 831,000 tonnes, which resulted from low demand and inventory adjustments made by customers. These factors led to further production curtailments.
In June, Billerud had already anticipated second-quarter results to fall below market expectations due to the decrease in sales volume and the revaluation of finished goods inventory.
Christoph Michalski, the president and CEO of Billerud, acknowledged that the second quarter was challenging, with sales volumes reaching an all-time low and currency-neutral net sales declining by 18% compared to the same period last year.
The most significant sales decline occurred in North America due to ongoing inventory destocking and the subsequent production curtailments. Additionally, the historically high fiber costs in Europe further contributed to the weak financial result.
During the quarter, Billerud reported a net loss of SEK 481 million (€41.7 million), while the operating loss amounted to SEK 496 million (€43 million).
The company’s adjusted EBITDA reached SEK 188 million (€16.3 million), and the adjusted EBITDA margin was 2%.
This performance was impacted by low volumes, higher input costs, and the revaluation of finished goods inventory.
However, it was partly offset by increased sales prices, currency effects, and the implementation of its efficiency enhancement program.
Billerud anticipates weak market conditions to persist in the third quarter, leading the company to continue production curtailments. The third quarter is also expected to be affected by a negative mix impact and some price reductions. However, input costs are likely to decline, except for wood raw material costs in Europe.
In recent news, the company has agreed to divest Managed Packaging, which provides packaging solutions to global brand owners, to Mimir Group.