OREANDA-NEWS. June 05, 2013. RusForest's revenue increased by 43% to SEK 156.9 million (USD 23.8 million) in 1Q 2013 compared with 1Q 2012. This is in line with the increase in the main component of revenue being sawnwood sales, as the company said in a press release received by Lesprom Network.

Arkhangelsk LDK-3 shipped 19,093 cubic metres of sawnwood in 1Q 2013 compared with 6,525 cubic metres in 1Q last year which caused nominal reduction in price for sawnwood due to sales on FOB terms at the sawmill as opposed to the Siberian sawmills that sell FCA Russian border. Log sales increased dramatically. This was primarily due to sales of low grade logs to Chinese customers at the nearby railway station in Boguchany and also caused reduction in the average price. Pulpwood and woodchips sales volumes fell significantly primarily as a result of downscaling in Ust-Ilimsk.

RusForest’s cost of sales for 1Q 2013 was SEK 151.4 million (USD 23 million). The Group's gross margin improved from negative SEK 39.3 million (USD 6 million) in 1Q 2012 to positive SEK 5.4 million (USD 818,181) in 1Q 2013 mainly due to restructuring of non-core assets, normal shipments in Arkhangelsk and stable production in Magistralny. It should be noted that normalization of shipments from Arkhangelsk does not cause an increase in distribution expenses due to FOB sawmill shipment terms.

The Group’s net income for 1Q 2013 was SEK 188.1 million (USD 28.5 million) compared to loss of SEK 115.7 million (USD 17.5 million) in 1Q 2012. Adjusted for the gain from the bond restructuring in the current quarter, the Group incurred a net loss of SEK 81.7 million (\\$12.4 million).

Garrett Soden, the Company’s CEO, commented, “We made significant progress in the 1Q 2013 by increasing production volumes, reducing our EBITDA loss and closing the restructuring transaction. We raised approximately USD 28 million and brought-in Nova Capital as a Russian strategic shareholder. With the subsequent sale of non-core assets for aggregate proceeds of USD 7 million, we have removed loss-making operations from the Group and can now focus on improving our core operations.”

RusForest is a Swedish forestry company operating in Eastern Siberia and the Arkhangelsk region of Russia. The Company controls long-term timber leases and utilizes these resources to produce a wide range of sawnwood products.