An efficiency enhancement program was launched during the third quarter, primarily in the hygiene and packaging operations, worth a total of SEK1400 million, including SEK 900 million in items affecting cash flow. The third quarter was charged with SEK350 million in restructuring costs. The measures will lead to annual savings of approximately SEK700 million within a two-year period.
Ahlstrom reports sales decrease
Ahlstrom reported a decline in demand during the first nine months of 2011. The result is sales decreased to €389.7 million compared to €413 million. At the same time, operating loss was €17.2 million.
The overall demand for several of the company's products continued to decline after the summer holiday season. The demand for specialty paper materials, such as flexible packaging and release liners, as well as transportation filtration materials fell in the review period. The market for specialty reinforcements used by the wind energy industry in Ahlstrom's main markets continued to decline.
Meanwhile, the demand for materials used by the beverage and food packaging industries, such as tea bags and baking papers, rose. The demand for wallcover materials and metalized labels continued to grow in the quarter, while demand for flooring materials was stable.
In October, Ahlstrom announced it would implement a profit improvement program to address its underperforming businesses. The program aims to generate an annual profit improvement of about €15 million and may affect about 400 employees. Additionally, Ahlstrom's divestment of its Home and Personal (wipes) business to Suominen, which was completed in October, will have a major impact on future results, allowing Ahlstrom to strengthen and expand its value added businesses.
Suominen grows sales
During the first nine months of 2011, Suominen's net sales grew while its operating profit declines. At the same time,sales margins improved during the third quarter but production volumes were lower than average.
During the third quarter Suominen generated net sales of €43.1 million down slightly from €43.4 million. Operating loss grew to €1.9 million.
Net sales for the nine-month period totalled €130.8 million (128.1) while operating loss was €2.5 million (2.2).
The rise in raw material prices halted compared to the first six months of the year. Shorter review periods for some raw material clauses included in sales contracts were implemented. Production volumes were lower than average due to the summer season, which led to a negative result. Operating costs were down from the corresponding period in 2010. The result included €1 million in nonrecurring costs.
U.S. line benefits Providencia's results
Companhia Providencia reported its sales volumes were 22,700 tons during the third quarter, reflecting a 15.3% increase from the prior year. This increase was due largely to the start-up of the company's first U.S. production line, which has already contributed 5530 tons in sales in the first nine months of the year and generated a positive result in the third quarter. Revenues reached R$142.8 million during the same period, 22.4% more than the third quarter of last year.
At a meeting of the board of directors on September 20, approval was given to the full prepayment of 15,000 of the company's debentures trading in the market, that took place on October 31, 2011. The balance of the principal totaled R$100.5 million.
Fiberweb issues results
Nonwovens producer Fiberweb has reported year-to-date sales growth of around 2%, despite weaker-than-expected demand. Geosynthetics has traded well with Boddingtons and Tubex both trading in-line with expectations.In Industrial, shipments to residential construction markets in Europe and North America were lower, impacted by weak markets as well as the planned closure of the site at Königswinter, Germany and the relocation of its activity to an upgraded facility in Berlin, Germany.Filtration sales have been stable, other than a significant reduction of filtration sales to North Africa as a result of political developments in that region, while the agricultural season has got off to a strong start. Hygiene volumes in the period have also been generally stable, with strength in spunbond mitigating relative weakness in airlaid and carded products.
After major capital expenditure on upgrading industrial manufacturing assets, completion of a new industrial research and development facility as well as restructuring associated with post-acquisition integration and site rationalization, net debt at the end of October was £145 million.
In other news, Fiberweb announced it will sell the majority of its hygiene business, a move that will allow Fiberweb to repay all its existing net debt.The remaining, more focused Industrial business will employ a much strengthened balance sheet to accelerate its development towards becoming a leader in attractive segments of the growing markets for technical fabrics and geosynthetics
Glatfelter sales jump
Glatfelter reported that sales jumped 10% to reach a record $416.5 million in the third quarter. Earnings were $12.8 million, down from $16.7 for the prior year period. These results reflect the continued success of the company's Composite Fibers and Advanced Airlaid Materials businesses, which are described as Glatfelter's global growth engines. The company's Advanced Airlaid business, acquired last year from Concert Industries, grew revenue by 14% to $66 million, driven by the feminine hygiene market. "We are pleased with the continued progress the Advance Airlaid Materials business is making to improve its profitability," says chairman and CEO Dante Parrini. "This was accomplished while also constructing and beginning the start-up of a second proprietary festooning line in Gatineau, Canada."
Operating income in the airlaid business was $4.1 million, marking the third consecutive quarter of higher profitability and a nearly three-fold improvement from results in the same quarter of 2010. Selling increases have outpaced higher input costs and the business's overall performance benefited from previously outlined improvement initiatives including supply chain synergies, waste reduction and higher machine output.
Looking forward, shipping volumes for the Advanced Airlaid Materials business unit in the fourth quarter of 2011 are expected to decline approximately 5% due to normal seasonality. In addition, selling prices and input costs are expected to be largely in-line with the third quarter levels.
Buckeye nonwovens sales down slightly
Buckeye's nonwovens sales decreased to $64.6 million during the first quarter compared to $68 million the year before while operating income split in half, decreasing from $4.6 million to $2.3 million. Total sales increased 19.9% to $240 million versus last year's first quarter sales of $202 million. Sales benefited from higher selling prices and increased cotton linter pulp shipment volume.
Comparing the first quarter of fiscal 2012 to the fourth quarter of fiscal 2011, sales were down $16 million or 6% lower as the company rebuilt inventories at its Foley mill back to target levels and nonwovens shipment volumes were down.
"We were pleased with our first quarter fiscal 2012 financial results. As we said on our August earnings call, our record fourth quarter revenue of $256 million was going to be hard to duplicate in the first quarter due to very low beginning specialty wood fibers inventory levels. Our first quarter sales revenue of $240 million is our second best quarter ever, and our gross margin of 23.7% of sales was significantly better compared to last year's 18.0%," says chairman and CEO John Crowe. "The key drivers to year over year improvements continue to be strong markets and selling prices, better capacity utilization at our Memphis specialty cotton fibers plant, and benefits from our cost improvement initiatives. We maintained a balanced approach to the allocation of the cash flow generated during the quarter. Our excellent first quarter cash flow generation allowed us to pay a record bonus to all of our employees (reflecting the record FY 2011 performance), invest $11 million in capital projects, repurchase 356,000 shares ($8.6 million) of Buckeye common stock, increase our dividend to six cents per share, and further reduce our debt by $7 million. We expect strong sales, earnings and cash flow trends to continue."
Lydall sales increased significantly
Lydall reported net sales increased 20.6% during the third quarter, due largely to gains in the Thermal/Acoustical segment, which increased 33.5%. Sales were $93 million compared to $77.7 million the year before; gross profit increased from $11 million to $14.5 million, due to higher sales and margin improvements during the third quarter, which offset lower gross profit in the Performance Materials segment.
"The third quarter of 2011 continued to demonstrate strong sales and customer demand for Lydall products," says chairman and CEO Dale Barnhart. "We have made good progress on manufacturing and process improvements in our fiber parts product family of the Thermal/Acoustical segment, and the metals parts product family has consistently performed well. We incurred significant maintenance and certain one-time costs in the Performance Materials segment in the third quarter which contributed to disappointing period results. But excluding the impact of the sale of the electrical papers product line in 2010, the segment still performed well on a year-to-date basis compared to the prior year."
Pegas releases 3Q results
Pegas Nonwovens reported sales increased 7.9% to €43.7 million during the third quarter, driven largely by growth in polymer prices. Third quarter EBITDA grew 17% reaching €10.8 million.
"The significant growth in polymer prices that negatively affected our profitability in the first half of the year reversed in June and prices started to decline. This development had a positive effect on our financial results in the third quarter," says CEO Franti�ek Rezac.
In the third quarter of 2011, profit from operations (EBIT) amounted to EUR 8.6 million.