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. Fixed costs are slightly lower in the summer, however, due to fewer maintenance projects and lower seasonal employee benefits expense. 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 while machines are running, BillerudKorsnäs’ production units normally requires a more extensive maintenance at some point during the year. To perform this maintenance, production of pulp, paper and board is stopped – known as a maintenance shutdown. The cost of a maintenance shutdown chiefly consists of lost volumes related to the shutdown and fixed costs, primarily in the form of costs of maintenance and overtime. It also comprises variable costs to a certain extent, for instance higher consumption of electricity and wood when production starts up again. The effect of the shutdown on earnings varies depending on the extent of measures carried out, their character and the actual length of shutdown. The estimated cost of the shutdown is an assessment of the impact on earnings of a normal shutdown in relation to a quarter without a periodical maintenance shutdown.
|Estimated shutdown cost (SEKm)||Estimated distribution of shutdown cost by business area||Planned times of maintenance shutdowns|
|Gävle||~140||~5%||~80%||~15%||Q3 | Q3 | Q3|
|Gruvön*||~140||~40%||~10%||~50%||Q2 | Q2 | Q2|
|Frövi||~90||0%||100%||0%||Q4 | Q4 | Q4|
|Skärblacka||~120||~85%||0%||~15%||Q2 | Q2 | Q4|
|Skärblacka**||~20||100%||0%||0%||Q3 | - | -|
|Karlsborg||~55||100%||0%||0%||Q3 | Q3 | Q3|
|Pietarsaari||~15||100%||0%||0%||Q2 | - | Q4|
|Rockhammar||~15||0%||100%||0%||Q3 | Q4 | -|
*Gruvön will have a maintenance shutdown end of March 2017, affecting both Q1 and Q2 financial statement. In Q1 the estimated cost is SEK 60 million and in Q2 SEK 80 million.
**Skärblacka will have an additional maintenance shutdown at PM7, end of September 2017, affecting both Q3 and Q4 financial statement. In Q3 the estimated cost is SEK 5 million and in Q4 SEK 15 million, all affecting business area Packaging Paper.
Maintenance shutdowns at Beetham, Rockhammar and Tervasaari have an insignificant effect on BillerudKorsnäs' total earnings.
Estimated shutdown costs is an assessment of shutdown costs during 2017.