BillerudKorsnäs’ activities are relatively unaffected by seasonal variations. Periodical maintenance shutdowns have the largest impact, as each unit stops production for approximately one week. This means that deliveries are somewhat lower for quite some time before, during and after the shutdown.
BillerudKorsnäs’ costs are relatively stable throughout the year. However, the seasonal employee benefits expense is lower during the summer months. Energy costs are slightly higher in the winter because of higher energy consumption and normally higher energy prices, especially for electricity.
In addition to ongoing maintenance during production, BillerudKorsnäs’ production units require more extensive maintenance at some time during the year. This maintenance requires the production of pulp, paper and board to stop. The principle cost items in a maintenance shutdown are loss of volumes arising from the shutdown and fixed costs, mainly maintenance and overtime costs, as well as certain portion of variable costs, including higher consumption of electricity and wood when production is restarted. The effects of shutdowns on earnings vary depending on the extent of measures carried out, their nature and the actual length of the shutdown. The estimated cost of shutdown involves an assessment of the impact on earnings of a normal shutdown compared with a quarter during which no periodic maintenance shutdown takes place.
In the first six months of 2020 no planned maintenance shutdowns were carried out. Due to Covid-19, the maintenance shutdowns that were planned to be held during the second quarter were postponed until the second half of the year.
|Estimated shutdown cost*||Estimated distribution of shutdown cost by division||Planned dates of maintenance shutdowns|
|Gävle||~150||100%||Q3 | Q2 | Q3|
|Gruvön||~155||~95%||~2%||~3%||Q3 | Q3 | Q2|
|Frövi||~110||100%||Q4 | Q4 | Q4|
|Skärblacka||~150||~10%||~90%||Q4 | Q2 | Q2|
|Karlsborg||~55||~98%||~2%||Q3 | Q3 | Q3|
|Pietarsaari||~15||100%||Q4 | - | Q4|
|Rockhammar||~15||100%||Q4 | Q4 | Q4|
* Maintenance shutdowns at Beetham have an insignificant effect on BillerudKorsnäs' total earnings.