OREANDA-NEWS. September 03, 2013. RusForest generated SEK 135.7 million (USD 20.6 million) of revenue in the 2Q 2013 compared to SEK 153.6 million (USD 23.3 million) in the 2Q 2012, as the company said in the press release received by Lesprom Network.

In 2Q 2013, the total Group's revenue included downscaled Ust-Ilimsk revenue which resulted in a reduction of the total revenue by 12% compared with last year. Excluding Ust-Ilimsk, the total revenue increased by 7% in 2Q 2013 compared with 2Q 2012.

This is in line with the increase in the main component of revenue being sawnwood sales, however, offset by slight reduction in prices attributable to disposal of accumulated low quality sawnwood and effect of customer prepayments taken in Arkhangelsk in Q1 2013. Pulpwood and woodchip sales volumes fell to negligible amounts due to the restructuring of Ust-Ilimsk and the collapse of pulp production in the northwest.

2Q unadjusted EBITDA reduced by 68% to SEK -27.8 million (USD 4.2 million); 2Q 2012: SEK -87.1 million (\\$13.2 million). The main factors that contributed to the improvement were:

- Finalizing 2012 reconstruction of the Siberian sawmills, primarily in Boguchany;

- Restructuring and sales of non-core assets;

-Operational improvements in all sites, primarily in Magistralny.

RusForest's gross margin improved from a negative SEK 43.8 million (USD 6.6 million) in 2Q 2012 to a negative SEK 12.8 million (USD 1.9 million) in 2Q 2013. The main factors for the improvement were sawmill modernization and improvement efforts in Magistralny as well as cost reduction in Boguchany.

The Group’s net loss for 2Q 2013 was SEK 77.1 million (USD 11.7 million) compared to SEK 184.8 million (\\$28 million) in the 2Q 2012. In addition to reduction of losses in continued operations and restructuring of the bond, the Group sold certain non-core assets.

Matti Lehtipuu, the Company’s new CEO, commented: “The 2Q included several organisational and operational changes at RusForest following the addition of Nova Capital as the new major shareholder in March 2013. Despite the many changes, we reduced our overall EBITDA loss by 68% from the prior year. Our progress is somewhat limited by the seasonal slowdown in log hauling during the 2Q in Russia. However, the focus of the Company continues to be on cash flow and profitability instead of absolute volumes.”

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.