OREANDA-NEWS. October 29, 2014. Norske Skog continues the positive trend of reducing costs. High production at the mills in a demanding market shows the relative competitive position of the group, as the company said in the press release received by Lesprom Network.

“Our competitive position has improved over the past year as a result of continuous improvement programs in all areas. Interest expense has been reduced by repayments of expensive bond loans and by replacement of cheaper securitisation facilities based on receivables totalling so far around NOK 800 million (USD 121 million). At the same time, we will continuously monitor the market situation, and if necessary implement active capacity management to counteract the effects of market imbalances,” says Sven Ombudstvedt, President and CEO of Norske Skog.

Norske Skog's gross operating earnings (EBITDA) in the 3Q 2014 were NOK 208 million (\\$31.5 million), down from NOK 251 million (USD 38 million) in the 2Q, but an improvement from 3Q 2013 of NOK 32 million (USD 4.8 million). The decrease was due to prolonged initiation of the new LWC-production at Boyer in Australia and a planned nine-week stop at one of three machines at Skogn in Norway.

Loss before tax for the period amounted to NOK -40 million (\\$6 million) in the 3Q, compared to a loss of NOK -165 million (USD 25 million) in the 2Q 2014. Loss after tax for the period amounted to NOK -192 million (USD 29 million) in the 3Q, compared to a loss of NOK -114 million (USD 17.3 million) in the 2Q 2014. The tax expense of NOK 152 million (USD 23 million) was mainly negatively impacted by a reassessment of deferred tax assets. Cash flow from operating activities before net financial items was NOK 46 million (USD 7 million) in the 3Q, compared to NOK 206 (USD 31.2 million) in the 2Q.

“Despite the generally high cost level in Norway, especially on wages, we have still in recent years implemented extensive cost cuts at our mills and headquarter. Efforts of creative staff have resulted in more efficient use of energy and raw materials, as well as lower fixed costs,” says Sven Ombudstvedt, President and CEO of Norske Skog.