Head of Moelven sees room for improvement

Photo: Moelven

Moelven has returned an operating profit of NOK 17 million for 2012. This is roughly the same as last year and is close to a break-even result. CEO Hans Rindal sees plenty of room for improvement.

The companies in the Building Systems division returned good results, and this yields a profit from operations for the Group as a whole. In Ängsnäs Glänta, a residential area in the south of Stockholm, has Åke Sundvall Byggnads AB built a wood modul based two apartment buildings of three floors supplied by Moelven ByggModul AS. Photo: Jan Lillehamre.

Operating revenues came to NOK 8,122 (8,060) million for the year as a whole. The profit for the year after interest and tax was minus NOK 47 (minus 86) million.

These unsatisfactory figures in 2012 are primarily the result of the challenging market conditions for the Group's sawmill division and considerable losses linked to a number of major projects in Moelven Elektro. The poor results achieved by Moelven's sawmills operations are due to low building activity in large parts of Europe. This has led to low market prices. In addition, the weakness of the euro in the second half of the year has contributed to reduced profitability in the export-oriented sawmills.

Hans Rindal, CEO of Moelven Industrier ASA, reports that the first half of the year was better than the second half, and that the net result was close to zero for Moelven – with a small profit from operations, but a loss after interest and tax. The Building Systems division returned good results, primarily from modules, system interiors and laminated wood, which help counteract the loss in Elektro. Combined with an operating profit for the building products division Wood, this yields a profit from operations for the Group as a whole.

"I am largely pleased with the way we are coping with the low international demand and increased competition at home, as a result of the sovereign debt crisis in Europe. However, we must do even better in the future, and adaptations take time. By contrast, I am not pleased about the problems we have brought upon ourselves. Elektro has projects that we are not able to finish properly, and a number of new investments in other parts of the Group are taking too long to yield positive results," says Rindal.

The main dividing line for Moelven in 2012 is between the companies that primarily sell on the domestic markets in Norway and Sweden and the companies that depend on exports. The units with mostly domestic customers did best, although there are exceptions in both groups.

Rindal explains that some parts of Moelven's operations are going very well, and he promises that the Group will improve its performance in the long term.

"In the first quarter 2013, we will return a loss, but after that we expect to start seeing positive results from many of the areas we are currently working on and are able to influence. We have to accept that there will always be economic upturns and downturns. The last time we were in a similar position was during the financial crisis in 2008/09. Back then our employees took the initiative and made the changes that were necessary, and were ready when demand picked up again. That is what we will do this time too," says Rindal.