Beat driven by higher volumes and lower costs
ARP reported a Group EBITDA of PLN 125m, which compares to ABGSCe of PLN 63m. ~PLN 29m of the beat was driven by Pulp (Rottneros published its Q3 report 26 October, i.e, figures known to the market). Paper EBITDA came in at PLN 97m vs. ABGSCe PLN 65m. Roughly half of beat was driven by volume/production, while the balance were driven by lower raw material costs and opex. Prices were in line with expectations. Paper EBIT was PLN 77m, 75% above ABGSCe PLN 44m. Group EBIT came in at PLN 95m vs. ABGSCe of PLN 31m. EPS came in at PLN 0.74 vs our estimate of PLN 0.43.
We had the following bridge for Q3: We expect Q3 Paper EBIT of PLN 44m, up from PLN 30m in Q2'23. Lower paper prices are offset by plunging pulp costs. The main effects q-o-q are likely: PLN -40m from lower paper prices (UWF prices down 5.3% q-o-q, CWF -5.5%), PLN 40m from lower pulp costs, PLN 5-10m from better volumes (destocking fades) and PLN 5m from lower chemical costs. We had Pulp EBIT down ~PLN 20m q-o-q. Hence, we expected Q3 Group EBIT of PLN 31m vs. PLN 39m in Q2'23.
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