Interim Report Q2
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Industriförvaltnings A B Kinnevik Interim Report 2001 January 1 - June 30 ADMINISTRATION loss of MSEK 261 (income 93). At the Annual General Meeting on May 18, the The net result for the period was a loss of MSEK shareholders approved the Board’s proposal that all 382 (income 73). the shares in Transcom WorldWide S.A. (Transcom) The loss per share for the period amounted to be distributed to Kinnevik’s shareholders. With the SEK 6.07 (earnings of 1.16). purpose of clarifying such a distribution, Transcom The comparative figures for the period January- is therefore presented separately in this interim June 2000 are pro forma and relate to the Kinnevik report. The shares in Transcom are presented in the Group and the companies now belonging to the balance sheet of June 30 as an external sharehol- Group. ding. Consequently, the Transcom income state- ment and balance sheet are not included in the RESULT FOR THE SECOND QUARTER OF 2001 Kinnevik consolidated figures for the first half of Net turnover for the second quarter of 2001 amoun- 2001. ted to MSEK 1,588 (1,338). The Korsnäs Holding Since 1976 Kinnevik’s shares have generated an Group’s net turnover amounted to MSEK 1,508 average effective yield of 24% per year as a result of (1,251). The net turnover of Other subsidiaries rising prices and dividends, including the value of amounted to MSEK 79 (92). warrant offers and subscription offers. During the Operating income amounted to MSEK 356 (105). past five years, Kinnevik’s shares have generated This figure includes income from corporate deve- an average effective yield of 28% per year. lopment and income from sales of securities The value of the Group’s holdings of listed secu- amounting to MSEK 150 (loss 2). After adjustment rities amounted to MSEK 14,495 at June 30, 2001. for these non-recurring items, operating income On August 6, 2001 the value was MSEK 13,451, increased from MSEK 107 to MSEK 206, or by 93%. which means that the premium over the book value Kinnevik’s interest in the earnings of affiliated of the Group’s listed portfolio amounted to MSEK companies amounted to a net loss of MSEK 40 (loss 1,086 on that date. 372), of which Millicom International Cellular S.A. (MIC) accounted for MSEK 39. MIC’s loss after RESULT FOR THE FIRST HALF OF 2001 financial net amounted to MUSD 4. Net turnover for the first six months of 2001 Financial revenue and expense amounted to a net amounted to MSEK 3,187 (2,714). The Korsnäs expense of MSEK 81 (expense 148). Holding Group’s net turnover amounted to MSEK Income after financial revenue and expense was 3,040 (2,549). The net turnover of Other subsidiari- MSEK 235 (loss 415). es amounted to MSEK 147 (171). The net result for the period was an income of Operating income amounted to MSEK 544 (977). MSEK 176 (loss 424). This figure includes income from corporate deve- The earnings per share for the period amounted lopment and income from sales of securities to SEK 2.79 (loss of 6.73). amounting to MSEK 150 (750). After adjustment for The comparative figures for the period April- these non-recurring items, operating income incre- June 2000 are pro forma and relate to the Kinnevik ased from MSEK 227 to MSEK 394, or by 74%. Group and the companies now belonging to the Group. Kinnevik’s interest in the earnings of affiliated companies amounted to a net loss of MSEK 649 MELLERSTA SVERIGES LANTBRUKS AB (loss 680), of which Millicom International Cellular Because of the mild and rather damp conditions of S.A. (MIC) accounted for a loss of MSEK 641. MIC’s early summer, cultivation got off to a good start, loss after financial net amounted to MUSD 196, of and the crops have been developing well. This is which MUSD 143 consisted of write-downs in the expected to have a correspondingly positive effect value of shares in Tele2 AB (Tele2). on the year’s harvests, for which prices are also Financial revenue and expense amounted to a net favorable. Demand for the ecologically cultivated expense of MSEK 156 (expense 204). crops is very good and as 35% of the acreage is far- Income after financial revenue and expense was a med in accordance with ecological principles, this is 2 expected to significantly contribute to the result. Korsnäs Industrial The acreage subsidies are increasing, partly because During the period, the market was characterized by of an increase in ecologically farmed acreage but continued strong demand for paperboard products, also because of the weak Swedish krona. while the market for fluff pulp and paper was cau- During the first half of the year, our Polish affili- tious. Overall, deliveries of paper, pulp and paper- ated company Rolnyvik acquired a number of adja- board products for the period are almost 5% higher cent estates in north-eastern Poland from the Polish than in the corresponding period last year. Price government. The estates cover a total of 4,676 levels are relatively stable, which, combined with hectares with 750 dairy cattle and 900 young the weakness of the Swedish krona, means that the animals. Net turnover for the first half of the year average price of products from Korsnäsverken is amounted to MSEK 10 (9) and the operating income some 7% higher than for the corresponding period was MSEK 6 (3). The results of the Polish estates are last year. Total revenue is thus some 12% higher not included as they were operationally integrated than for the first six months of last year. June 20. When it comes to costs, the effects of staff reviews continue to show through in the form of lower pay- KORSNÄS HOLDING AB roll expense. Measures intended to reduce costs are Korsnäs Holding AB is the parent company of continuing and an adaptation of personnel and Korsnäs AB, which, together with its subsidiary capacity levels in the individual product areas is in companies, makes up the Korsnäs Group. progress. Korsnäs Industrial has also benefited Continued high demand, stable prices and favora- from falling commodity prices, but at the same time ble currency movements during the second quarter high energy prices during the period have had a contributed to a stable first six months for Korsnäs. significant, adverse effect on income. The Korsnäs Group’s net turnover for the first At Korsnäsverken, production for the first six half of the year amounted to MSEK 3,040 (2,549) months amounted to 336,000 tonnes, an increase of and operating income was MSEK 448 (275). The 3% compared to the same period last year. operating margin was 15% (11). Income after finan- Production of three-ply board at PM5 is progressing cial net amounted to MSEK 440 (226). well with steadily increasing capacity and at a qua- Korsnäs Forestry lity that satisfies our customers’ expectations. The wood market is characterized by falling pulp- Production on the other machines is also meeting wood and saw timber prices. Raw material inven- expectations. tory in Sweden are normal for the season. During The improved price level, combined with cost- the second quarter, Korsnäs concentrated on har- reducing measures, has given rise to a significant vesting its own forests after having concentrated on improvement in the business result at Korsnäs- drawing on its felling rights in the first quarter. This verken. contributed to an improved result for the second Korsnäs Packaging’s net turnover increased by quarter. Imports from Russia and the Baltic region 37% in relation to the first six months of last year, are proceeding according to plan. The weakening mainly due to the acquisition of UPM Kymmene’s market has affected Korsnäs’s sales of saw timber to sack business. The process of integration is continu- external sawmills and it is difficult to place further ing as expected and the acquired units report volumes of timber. improved revenue for the period. The results of the The transition from harvesting with employed division remain at an unsatisfactory level, despite personnel and company machinery to the outsour- rising prices. Market conditions for the period were cing of contract-harvesting services is now in its not favorable, which resulted in lower sales volu- final stages. The goal is to put the new organization mes than projected, particularly in Germany and into operation during the fall. Scandinavia. The consequence of this was a weak Net turnover for the first half of the year amoun- first half year. However, lower production costs as ted to MSEK 804 (739) and operating income was a result of extensive restructuring are creating a MSEK 127 (124). strong platform for the future. 3 The market for redwood products has been had a turnover of MSEK 50 (47) for the period and under intense pressure for some considerable time. operating income was MSEK 3 (0). Despite this, Korsnäs has managed to consolidate price levels for its products. The market for sawn CIS CREDIT INTERNATIONAL SERVICES AB timber is expected to continue to strengthen slowly CIS was founded in 1995. The Company offers all for the remainder of the year, especially within the the services that are provided by a company’s segment for customized products. Production is financial department. CIS also offers a complete 12% below the previous year’s level, which is main- range of services within complementary fields such ly attributable to the running-in of new production as credit information, customer support, debt col- units. Measures have been taken to reduce the dis- lection, payroll and accounting.