Norske Skog's EBITDA in the first quarter of 2024 was NOK 76 million, a decrease
from NOK 760 million in the fourth quarter of 2023. The fourth quarter EBITDA
was significantly influenced by business interruption insurance of NOK 625
million at Norske Skog Saugbrugs. The first quarter EBITDA was negatively
impacted by deconsolidation of Norske Skog Tasman of NOK 46 million and lower
European CO2-allowance prices of NOK 32 million. Demand for publication paper is
stabilising, but further capacity closures are still required. Containerboard
demand is increasing but still experiences excess capacity.

"We are very satisfied with the demand for our publication paper products in the
first quarter. We have invested close to EUR 500 million into containerboard and
energy projects over the past three years, and we still maintain a very strong
balance sheet and cash position. We are highly satisfied with the production
ramp-up at Bruck. The feedback from our customers on product quality is
positive, and this is promising for our plan to deliver a total of 760 000
tonnes of packaging paper from Bruck and Golbey into the market in the coming
years. Along with the Saugbrugs management team, we have continued to identify
future opportunities for Saugbrugs industrial site, and we hope to announce
further details during the second quarter," says Geir Drangsland, CEO of Norske
Skog. 

Cash flow from operations was NOK -69 million in the quarter compared to NOK 973
million in the previous quarter. The first quarter cash flow was influenced by
low earnings, seasonal increase in working capital, and restructuring expenses.
Operating earnings in the first quarter of 2024 were NOK -177 million compared
to operating earnings in the fourth quarter of 2023 of NOK 629 million. The
operating earnings in the quarter were negatively affected by non-cash changes
in fair value of energy contracts in Norway amounting to NOK 115 million. 

Loss before taxes in the quarter was NOK 382 million compared to profit before
taxes of NOK 586 million in the previous quarter. The net loss was among other
things also negatively affected by non-cash currency exchange changes related to
interest-bearing debt. Net interest-bearing debt increased from NOK 2 590 to 3
246 million at the end of the quarter due to a weaker NOK and continued capital
expenditures. The equity ratio was 41%.

Operations
Total annual publication paper production capacity for the group is 1.6 million,
with 1.3 million tonnes in Europe and 0.3 million tonnes in Australia. Norske
Skog Bruck (PM3) started production of recycled containerboard paper in first
quarter of 2023, and Norske Skog Golbey (PM1) plans to start in the second half
of 2024. Norske Skog will after the ramp-up of Norske Skog Bruck and Norske Skog
Golbey have an annual capacity of 760 000 tonnes of packaging paper production. 

According to Euro Graph, demand for standard newsprint in Europe decreased by 3%
through February 2024 compared to the same period last year. SC magazine demand
decreased by around 3%. LWC paper demand decreased by around 1% through February
2024 compared to the same period last year. According to PPPC trade statistics
for Australia, demand for newsprint and coated mechanical decreased by 44% and
12%, respectively, through February 2024 compared to the same period last year. 

"Despite declining markets and reduced machine capacities, we are very pleased
to have achieved an increased market share with higher sales volumes in the
first quarter of 2024 compared to the same quarter last year," says Geir
Drangsland, CEO of Norske Skog.

 
Publication paper
Operating income decreased from the previous quarter mainly due to the
recognition of business interruption at Norske Skog Saugbrugs in the fourth
quarter. Somewhat lower publication paper sales volumes and sales prices,
deconsolidation of Norske Skog Tasman and lower European CO2-allowance prices
impacted earnings negatively. Despite positive demand sentiment in the
publication paper market, there is still a market imbalance for publication
paper. 

Variable costs per tonne decreased in the quarter, both in absolute terms and
per tonne for cost of materials caused by lower energy costs but was somewhat
offset by higher pulpwood cost in Norway. Distribution costs increased slightly
in the quarter. Fixed costs both in absolute terms and per tonne decreased
significantly due to lower costs related to the rockslide clean-up at Norske
Skog Saugbrugs. Group capacity utilisation was 86% in the quarter, 85% in Europe
and 89% in Australasia. Norske Skog Saugbrugs PM6 is excluded from the
calculation from 27 April 2023. The European utilisation was impacted by some
downtime at one newsprint machine at Norske Skog Skogn in the period. 

Packaging paper
The packaging paper machine at Bruck is operating according to the ramp-up plan.
The containerboard production will reach full capacity utilisation in the third
year of production. Due to the current market environment the operating income
for the first quarter was lower than the mill gate cash costs.

"We are dedicated to deliver high containerboard production performance and
quality products from both Bruck and Golbey, from the second half of 2024," says
Geir Drangsland, CEO of Norske Skog. 

Key figures, first quarter of 2024
NOK million (unless otherwise stated)	
                       Q1 2024	Q4 2023	Q1 2023
Income statement	 	 	 
Total operating income	2 688	3 763	3 320
EBITDA	                76	760	675
Operating earnings	-177	629	85
Profit before tax	-382	586	-148
 	 	 	 
EBITDA margin %	        2.8	20.2	20.3
Capacity utilisation publication paper %	
                        86	85	78
			
Cash flow			
Net cash flow from operating activities	
                       -69	973	430
Net cash flow from investing activities	
                       -377	-677	-367

Balanse	            31.03.24	31.12.23	31.03.23
Total assets	      14 644	14 755	        14 502
Equity	               6 004	6 161	        6 045
Equity %	          41	  42	         42


Status projects

Norske Skog Golbey conversion projects
At Norske Skog Golbey, the conversion of the newsprint paper machine (PM1) into
recycled containerboard paper production is progressing towards start-up in the
second half of 2024. Norske Skog Golbey will eventually add 550 000 tonnes of
new low-emission packaging paper capacity after ramp-up completion in 2026,
which will be fully based on recycled fibre. Golbey PM1 will utilise renewable
energy generated from the biomass plant under construction at the Golbey
industrial site (Green Valley Energie). 

 
Norske Skog Skogn new TMP-line
Norske Skog Skogn will in the second quarter of 2024 complete the construction
of a net NOK 180 million new thermo-mechanical pulp (TMP) line, which
substitutes recovered paper with fresh fibre. The project proceeds according to
budget and timeline. The new TMP line will reduce variable costs, in addition to
reducing NOx emissions, fossil CO2-emissions and waste sent to landfill. As of
the first quarter, approximately NOK 157 million had been invested in the
TMP-line.

Norske Skog Saugbrugs rockslide
The rockslide at Norske Skog Saugbrugs on 27 April 2023 caused material damage
to building structures, machinery, and equipment relating to paper machine PM6,
which will remain idled for the rest of 2024. Norske Skog has signed an
insurance settlement worth up to NOK 2.4 billion to cover business interruption,
site restoration, and machinery and equipment investments. Norske Skog is
currently identifying future opportunities for the Norske Skog Saugbrugs
industrial site. 

Outlook
The development in the global economy is of vital importance for consumer
spending, and this impacts the publication paper and packaging industry, and
thus Norske Skog's operations and results. Demand for Norske Skog's products
have started to improve during the first quarter of 2024 and is expected to
improve through 2024.

The raw material and energy markets, which are important for both publication
paper and packaging paper production, are expected to remain uncertain, although
prices have come down closer to historical levels. Cost of recycled paper has
come closer to trend prices, but the quality and availability has deteriorated.
This trend is expected to persist for the remainder of 2024. Pulpwood prices is
expected to remain at higher levels for 2024.

The level of input costs and demand for paper will continue to influence paper
sales prices in Europe. Both publication and packaging markets are characterised
by excess capacity and capacity reductions are required to balance the markets.
Utilisation is expected to remain weak until capacity is reduced. Norske Skog's
European operations are cost-competitive, and the group will continue to
temporarily adjust production to customer demand.
Production of recycled containerboard in Norske Skog Bruck is expected to
increase in line with plan over the coming quarters. However, expect negative
EBITDA from the Packaging Paper segment in 2024 due to fixed costs from Norske
Skog Golbey PM1 following start-up of production in the second half of 2024.

Norske Skog Saugbrugs PM6 will remain out of the SC market for entire 2024.
Potential investments into expansion projects at Saugbrugs will release
additional insurance compensation of NOK 615 million. Production from PM5 is
progressing well and expected to continue. 

In Australasia, price increases were implemented towards the end of 2023 and is
expected to have a positive impact in coming periods, but reduced demand in the
region may increase exposure through higher export volumes. Norske Skog will
continue to develop its industrial sites, among others within bio products and
renewable energy, both on a stand-alone basis and in partnerships. 

About Norske Skog
Norske Skog is a leading producer of publication paper with strong market
positions and customer relations in Europe and Australasia. The Norske Skog
Group operates four mills in Europe, which produce publication paper, recycled
packaging paper, energy and bioproducts. In addition, the Group operates one
paper mill in Australia. Norske Skog aims to further diversify its operations
and continue its transformation into a growing and high-margin business through
a range of promising energy and bio product development projects. The Group has
approximately 2 100 employees, is headquartered in Norway and listed on the Oslo
Stock Exchange under the ticker NSKOG.

Presentation and quarterly material
The company will not hold a live presentation but will arrange a webinar today
at 08:30 CEST for pre-registered participants. The quarterly recording, the
presentation, the financial statements and the press releases are available on
www.norskeskog.com  and published on www.newsweb.no under the ticker NSKOG. If
you want to receive future Norske Skog press releases, please subscribe through
the website of the Oslo Stock Exchange www.newsweb.no. 


Norske Skog
Communications and Public Affairs

For further information:
Norske Skog media:
Vice President Corporate Communication and Public Affairs
Carsten Dybevig
carsten.dybevig@norskeskog.com
Mob: +47 917 63 117

Norske Skog Investor Relations:
Vice President Corporate Finance
Even Lund
even.lund@norskeskog.com
Mob: +47 906 12 919