Norske Skog's EBITDA in the fourth quarter of 2023 was NOK 760 million, an
increase from NOK 327 million in the third quarter of 2023. The fourth quarter
EBITDA was influenced by business interruption insurance of NOK 625 million,
also covering 10 months in 2024 of NOK 460 million at Norske Skog Saugbrugs In
addition, EBITDA in the quarter was influenced by a NOK 57 million gain from
sale of the Norske Skog Tasman mill site. The cash flow from operations in the
quarter was NOK 973 million, improving the financial position and liquidity due
to receipt of NOK 720 million in insurance proceeds in the quarter. The
publication paper markets remain weak, and further capacity closures are
required. Containerboard demand increases, but this market still experiences
excess capacity.

"We are very satisfied with the NOK 2.4 billion insurance settlement agreed in
the fourth quarter for business interruption and property damage related to the
rockslide at Norske Skog Saugbrugs in April 2023. This provides us with an
opportunity to assess options for development of Norske Skog Saugbrugs. However,
lower production and carrying of fixed costs at Bruck, Golbey and Saugbrugs
while the mills are transformed, impacts our operating earnings negatively
during the quarter. During the ramp-up of production of containerboard at Bruck,
and the conversion and ensuing ramp-up at Golbey, we will continue to experience
relatively higher cost per tonne produced," says Geir Drangsland, CEO of Norske
Skog. 

Cash flow from operations was NOK 973 million in the quarter compared to NOK 173
million in the previous quarter, mainly due to insurance proceeds related to
property damage and business interruption at Norske Skog Saugbrugs of NOK 720
million, proceeds from the sale of Tasman of NOK 70 million, and NOK 399 million
in reduced working capital. Operating earnings in the fourth quarter of 2023
were NOK 629 million compared to operating earnings in the third quarter of 2023
of NOK 36 million. The operating earnings in the quarter were positively
affected by non-cash changes in fair value of energy contracts in Norway
amounting to NOK 97 million, and negatively affected by NOK 88 million in
impairments. 

Profit before taxes in the quarter was NOK 586 million compared to NOK 112
million in the previous quarter. The net profit was negatively affected by
increased interest expense and lower evaluation of financial investments. Net
interest-bearing debt decreased from NOK 2 662 to 2 590 million at the end of
the quarter. The equity ratio was unchanged at 42%.

Operations
Total annual publication paper production capacity for the group is 1.6 million
tonnes after the temporary idling of PM6 and restart of PM5 at Norske Skog
Saugbrugs, with 1.3 million tonnes in Europe and 0.3 million tonnes in
Australia. Bruck (PM3) started production of recycled containerboard paper in
the first quarter, and Golbey (PM1) plans to start in the second half of 2024.
Norske Skog will after the ramp-up of Bruck and 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
21% through November 2023 compared to the same period last year. SC magazine
demand decreased by around 24%. LWC paper demand decreased by around 26% through
November compared to the same period last year. According to PPPC trade
statistics for Australia, demand for newsprint and coated mechanical decreased
by 20% and 17%, respectively, through November 2023 compared to the same period
last year. 


Publication paper
Operating income increased from the previous quarter mainly due to recognition
of business interruption at Norske Skog Saugbrugs, gain on sale of Tasman
industrial site and sale of excess energy at Norske Skog Golbey and Saugbrugs.
Slightly lower publication paper sales prices were offset by higher delivered
sales volume compared to the previous period. The sales price decrease was
driven by weak demand and a market imbalance for publication paper. In the
fourth quarter, Norske Skog recognised all remaining business interruption of
NOK 625 million covering both the fourth quarter of 2023 and the first 10 months
of 2024 and property damage insurance of NOK 52 million.

Variable costs per tonne increased in the quarter, both in absolute terms and
per tonne for cost of materials and distribution costs caused respectively by
higher pulpwood cost and longer customer destination routes.  Fixed costs per
tonne increased due to higher operating expenses related to the clean-up from
the rockslide at Norske Skog Saugbrugs, which is offset by insurance coverage.
Group capacity utilisation was 85% in the quarter, 83% in Europe and 92% in
Australasia. Norske Skog Saugbrugs PM6 is excluded from the calculation from 27
April 2023. The weak publication paper demand caused some operational down-time
in the quarter, which impacted the capacity utilisation in Europe. 

Packaging paper
The packaging paper machine at Bruck is operating at 72% capacity utilisation,
which is in line with the ramp-up plan. The containerboard production will reach
full capacity utilisation during the fourth year of production. The operating
income for fourth quarter consists of revenue from deliveries and gate fees from
waste incineration, which were lower than the variable and fixed costs in the
period.

Key figures, fourth quarter of 2023
NOK million (unless otherwise stated)	Q423	Q323	Q422	YTD23	YTD22
Income statement	 	 	 	 	 
Total operating income                 3 763   3 036   4 056   13 524  15 214
EBITDA                                   760     327   1 083	2 142	3 105
Operating earnings                       629	  36	 944	  896	2 845
Profit before tax                        586     112   1 097      591   2 778
 	 	 	 	 	 
EBITDA margin %	                        20.2	10.8	26.7	 15.8	 20.4
Capacity utilisation publication paper%	  85	  89	  78	   82	   87
					
Cash flow					
Net cash flow from operating activities	 973	 173	745	1 928	2 040
Net cash flow from investing activities	-677	-949   -872    -2 689  -1 956

Balanse	               31.12.23  30.09.23  31.12.22  31.12.23  31.12.22
Total assets	        14 755	  13 898    13 609    14 755    13 609
Equity	                 6 161	   5 880     5 909     6 161     5 909
Equity %                    42	      42	43	  42	    43


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 fourth quarter, approximately NOK 121 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 entire 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 continues to
explore options for future production at the Norske Skog Saugbrugs 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, but it is expected to remain at a low level for 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 close to historical levels. Cost of recycled paper has
become close to trend prices, but the quality and availability are worsening.
This trend is expected to persist through 2024. Pulpwood prices increased
steadily through 2023 and is expected to remain at elevated levels for 2024.

The level of input costs and demand for paper will continue to influence paper
sales prices in Europe. Following demand declines through 2023, both publication
and packaging paper markets are characterised by excess capacity and capacity
reductions are required to balance the markets. Utilisation is expected to
remain weak until the capacity is reduced. Norske Skog's European operations are
cost-competitive, and the group will continue to temporarily adjust production
to customer demand. 

Norske Skog Saugbrugs PM6 will remain out of the SC market for the entire 2024.
PM5 was restarted in the fourth quarter of 2023 to serve customers previously
served by PM6. Production of recycled containerboard in Bruck is expected to
develop in the coming periods in line with a normal ramp-up curve. 

In Australasia, price increases have been implemented impacting the coming
periods, but reduced demand in the region may require increased 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