We have updated our models to reflect our new more cautious pulp price scenario, a much-improved currency situation and the Board’s decision to cancel the proposed extra dividend.
On the back of a fast-changing macro environment we have implemented a more cautious pulp price scenario. The price recovery that we had been looking for in Q2 we have postponed until 2021. Consequently, we have cut our 2020 EBIT estimate by 28%.
Good news for Rottneros is the rapid weakening of the Swedish krona recently. In Swedish krona terms we have increased our 2021 and 2022 pulp price assumptions, which also leads us to increase our EBIT forecasts by 27% in 2021 and 28% in 2022.
Rottneros announced (18 March) that, in order to be prudent in times of great uncertainty, it will cancel is proposed one-off extra dividend of SEK 0.20. The proposed ordinary dividend of SEK 0.40 remains unchanged. Based on our lowered estimates, Rottneros, is debt free by the end of 2020.
Link to research:
https://research.sebgroup.com/corporate/reports/100843
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