Arctic Paper S.A. Capital Group Consolidated report for 4Q 2012

POZNAŃ, Poland--(BUSINESS WIRE)--Regulatory News:

Management Board of Arctic Paper S.A. (STO:ARP) herewith publishes the Arctic Paper S.A. Capital Group Consolidated report for 4Q 2012.

Revenue

The main statutory activity of the Company is holding activity consisting in managing of entities belonging to the controlled Capital Group. Operating activity of Arctic Paper Group was, in 2012, conducted through paper mills, distribution companies and sales offices.

Sales revenue for the fourth quarter of 2012 amounted to PLN 17,996 thousand and comprised services rendered for entities belonging to the Group (PLN 11,484 thousand) and interest from loans (PLN 6,512). In the same period of the previous year standalone sales revenue amounted to PLN 19,242 thousand and comprised services rendered to the Group entities (PLN 7,649 thousand), interest from loans (PLN 8,261 thousand) and dividend income (PLN 3,332 thousand).

Standalone sales revenue for the third quarter of 2012 amounted to PLN 19,847 thousand and comprised services rendered for entities belonging to the Group (PLN 12,951 thousand), interest from loans granted (PLN 6,896 thousand).

Administrative expenses, cost of sales

In the fourth quarter of 2012 administrative expenses amounted to PLN 6,805 thousand and were lower both compared to analogous period of the previous year (by PLN 826 thousand) and the costs recorded in the third quarter of 2012 (by PLN 467 thousand).

Administrative expenses of the company include costs of the administration of the Company operation, costs of services provided to companies in the Group and all costs incurred by the company for the purpose of holding company activities. Among those costs, a significant group of costs can be distinguished that applies only to statutory activities and includes, among others: costs of tax, legal and accounting services, as well as the costs of the Supervisory Board and the Management Board.

In the third quarter of 2012 the Company started the activity of pulp procurement agency from external suppliers and sale of the pulp to mills belonging to the Capital Group. It was the primary reason for the increase of revenues from services in 2012 compared to 2011 and recognition of cost of sales (PLN 1,387 thousand in 2012).

Other operating income and cost

Other operating income amounted to PLN 73 thousand in the fourth quarter of 2012 which represents a decrease by PLN 115 thousand compared to analogous period of 2011. At the same time other operating cost also decreased, amounting to PLN 119 thousand. High other operating costs in 2012 resulted mainly from allowances for borrowings granted to Arctic Paper Investment GmbH and Arctic Paper Mochenwangen GmbH in the total amount of PLN 26,265 thousand.

Financial income and cost

In the fourth quarter of 2012 financial income amounted to PLN 828 thousand and were lower by PLN 3,118 thousand compared to financial income achieved in the fourth quarter of 2011 and higher by PLN 746 thousand compared to the third quarter of 2012. Financial cost in the fourth quarter of 2012 amounted to PLN 5,269 thousand, including costs of interest on bonds in the amount of 3,777 thousand. In the analogous period of 2011 financial cost amounted to PLN 8,567 while in the third quarter of 2012 it amounted to PLN 6,789 thousand.

The changes of financial income and cost result mainly from exchange differences which are presented net, that is as the difference between negative exchange differences and positive exchange differences presented as financial income in case of the excess of positive exchange differences over negative exchange differences or as financial cost in case of the excess of negative exchange differences over positive exchange differences.

General information

The Arctic Paper Group is the second-largest European producer of bulky book paper in terms of production volume, offering the largest product assortment in this segment, and one of Europe’s leading producers of fine graphic paper. The Group produces numerous types of uncoated and coated wood-free paper, as well as wood-containing uncoated paper for printing houses, paper distributors, book and magazine publishing houses and the advertising industry. As on the day of this report, the Arctic Paper Group employs over 1,600 people in four paper mills and fifteen companies dealing in paper distribution and sales. The Group’s paper mills are located in Poland, Sweden and Germany and have total production capacity of more than 800,000 metric tons of paper per year. The Group has three Distribution Companies which handle sales, distribution and marketing of products offered by the Group in Scandinavia and twelve Sales Offices providing access to all European markets, including Central and Eastern Europe. The Group’s consolidated sales revenues for the twelve months of the year 2012 totaled PLN 2,600 million. In December 2012, Arctic Paper S.A. acquired 39.44% of shares in Rottneros AB, a company listed on NASDAQ OMX in Stockholm, Sweden. Rottneros AB owns 100% in two pulp companies, one purchasing office and one company which produces food packaging. The acquisition of Rottneros shares was performed mainly in the form of exchange of Arctic Paper S.A. shares to Rottneros AB shares. Because of the free float of the rest of Rottneros AB shares, the possibility of appointing management staff and of influencing operation and financial decisions, as well as the ability of managing the business activity influencing return of Arctic Paper S.A. involvement in Rottneros Group, Arctic Paper S.A. took over the control of Rottneros Group on 20th December 2012, and from that day the Arctic Paper S.A. shares have been listed on NASDAQ OMX stock exchange in Stockholm (for details see note 2 in the interim condensed consolidated financial statements). Arctic Paper S.A. is a holding company established in April 2008. The Parent Company is entered in the commercial register of the Polish Court Register maintained by the District Court in Poznań – Nowe Miasto i Wilda, 8th Commercial Department of the Polish Court Register, under number KRS 0000306944.The Parent Company holds statistical number REGON 080262255.

This information is was submitted for publication on 28 February 2013 at 8:00 pm CET, in reference to Arctic Paper’s 4th quarter report 2012 filed with the Warsaw Stock Exchange.

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