Billerud expects the EBITDA for the Q2 2023 to be SEK 100-200 million ($9.5-19 million). The lower result is mainly due to significantly lower sales volume and revaluation of finished goods inventory.
Market conditions remain weak with low demand and slower than expected customer destocking. There are mainly two reasons behind the lower result for the Q2:
- Significantly lower sales volumes due to lower demand resulting in even further production curtailments. The volume drop is mainly attributed to North America and the result effect is estimated to SEK -280 million ($26.4 million). This volume loss is in addition to the idling of the Escanaba mill, which successfully resumed operations as planned on 8 May.
- Revaluation of finished goods inventory compared to at the end of the Q1. This cost impact compared to the Q1 is not affecting the cash flow and is estimated to SEK -310 million ($29.2 million).
To improve the profitability, Billerud is accelerating the delivery of the efficiency enhancement program that was launched in January, with an increased ambition for its EBITDA uplift during 2023 from SEK 400 million ($37.7 million) to SEK 600 million ($56.6 million). The effects from the program will mostly come during the second half of the year.
Effects of the efficiency enhancement program are achieved across Billerud’s supply chain, production and commercial operations. Some initiatives pushed forward at a faster pace are a higher share of field wood purchases, further acceleration of efficiency gains from board mill optimization, as well as actions to improve the customer and product mix.
Billerud is one of the leading manufacturers of packaging paper made from virgin fibers.
