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Norske Skog: Higher capacity utilisation and strengthened financial position

Norske Skog continues to strengthen operations in a difficult market. Capacity
utilisation in the first quarter remained high at 91% showing the
competitiveness of the business units.

- In a challenging market, we see a good trend with stable variable and lower
fixed costs. We are in a better cost position this year compared to prior
years, due to continued cost reduction programmes and better economies of
scale at our remaining units. We are adapting our production to market needs,
and we have currently received positive customer feedback on the first rolls
of LWC-paper from the newly rebuilt Boyer-machine, says Sven Ombudstvedt,
President and CEO of Norske Skog.

Norske Skog's gross operating earnings (EBITDA) in the first quarter of 2014
were NOK 153 million, down from NOK 298 million in the fourth quarter. The
decline reflected a loss at Boyer due to the LWC machine conversion,
continued loss at Walsum with time lag in optimizing production around one
machine, start-up at the new thermo-mechanical pulp plant at Saugbrugs and
seasonal sales volume effects.

Profit after tax for the period amounted to NOK 11 million in the first
quarter, compared to a loss of NOK 457 million in the fourth quarter of 2013.
The profit was impacted by an increase in the value of energy contracts due
to higher electricity prices. Net interest-bearing debt decreased by NOK 17
million to NOK 6 800 million. As of 23 April 2014, Norske Skog has bought
back bonds with maturity in June 2014 amounting to NOK 301 million. The
remaining amount due in June is NOK 395 million. Cash flow from operating
activities before net financial items was NOK 54 million in the first
quarter, compared to NOK 497 in the fourth quarter.

- We have successfully strengthened our financial position by entering into
new loan agreements for Skogn, Saugbrugs and Golbey totalling approximately
NOK 600 million based on outstanding accounts receivables. We are working on
similar agreements for the Bruck mill. Cost reductions and lower interest
expenses following the June bond maturities will also improve profitability.
We will continuously monitor the market situation, and if necessary implement
active capacity management to counteract the effects of market imbalances,
says Sven Ombudstvedt, President and CEO of Norske Skog.

Market and segments

Operating revenue decreased from the previous quarter, reflecting the closure
of one machine at Walsum in Germany and seasonally lower sales volumes.
Average selling prices were influenced by lower exposure to the LWC-market,
due to the Walsum closure.

Cost of materials per tonne was on level with the previous quarter. Fixed
costs declined, with a lower headcount at Walsum following the closure.

Demand for newsprint in Europe was flat in the first two months of the year
compared to the corresponding period last year. Demand for magazine paper
declined by 5%.

Operating revenue decreased compared to the previous quarter, reflecting the
standstill of the machine under conversion at Boyer. Furthermore, Singburi in
Thailand was fully deconsolidated in the first quarter. In the fourth quarter
of last year, Singburi was partially consolidated.

Cost of materials per tonne increased somewhat compared to the previous
quarter, reflecting higher energy prices in New Zealand. Fixed costs
increased due to a one-off reduction in environmental obligations in
Australasia in the fourth quarter.

Last years sharp decline in consumption has abated in the first quarter.
Demand for magazine paper in Australasia remains relatively flat.

Key figures, first quarter of 2014 (NOK million)

| Q1 2014 Q4 2013 Q1 2013 2013 |
|Operating revenue 2 867 3 534 3 186 13 339 |
|Gross operating earnings (EBITDA) 153 298 174 862 |
|Gross operating margin (%) 5.3 8.4 5.4 6.5 |
|Gross operating earnings after depreciation -28 102 -24 134 |
|Restructuring expenses -2 -149 0 -145 |
|Other gains and losses 114 -237 -153 -1 100 |
|Impairments 0 0 0 0 |
|Operating earnings 84 -283 -178 -1 111 |
|Share of profit in associated companies 8 9 5 26 |
|Financial items -77 -323 -333 -1 258 |
|Income taxes -4 140 124 500 |
|Profit/loss for the period 11 -457 -381 -1 844 |
|Profit/loss before special items -101 -71 -228 -599 |
|Net cash flow from operating activities -4 313 -106 68 |
New marketing agreements
Norske Skog and Björnberg 1781 have agreed to enter into a long-term marketing
agreement for sales of publication paper in the Czech and Slovak Republic and
in Poland. Björnberg 1781 will have the exclusive marketing rights for all
Norske Skog products to be sold in these markets. Norske Skog will transfer
its current sales operations and sales staff in these markets to Björnberg

Anti dumping actions by Australian authorities
Norske Skog welcomes the Australian Anti-Dumping Commission's (ADC)
announcement of an investigation into newsprint imported from France and
South-Korea. ADC will investigate whether newsprint paper has been exported
to Australia as the dumping may have caused significant financial harm to
Norske Skog.

New member of Corporate Management
Vice President Legal, Lars P. Sperre (37), has been appointed Senior Vice
President Corporate Strategy&Legal, and will from now on be a member of the
Corporate Management of Norske Skog. Sperre has been Vice President Legal in
Norske Skog since December 2007 and has been actively involved in the
strategic development of the Norske Skog Group during his service as VP

Outlook for 2014
Publication paper prices in Europe improved into 2014, with a better market
balance for newsprint and SC magazine paper. The European market for coated
magazine paper remains weak.

The converted paper machine in Australia will contribute to gross operating
earnings from the second quarter.

Variable costs for the group are expected to remain relatively stable. Fixed
costs will decline following ongoing cost reduction programmes.

Presentation and telephone conference

The interim financial statements will be presented in Karenslyst allé 2 in
Oslo today at 08.30 CET. The presentation will be transmitted live on Norske
Skog's websitewww.norskeskog.com. A recording of the presentation will be
published shortly afterwards.

An international telephone conference, open to questions from the financial
markets, will be held at 13:00 CET. The president and CEO, Sven Ombudstvedt,
and other members of corporate management will participate in both of these
events. A recording of the conference will be available shortly afterwards.

Conference call details: +44 1296 480 100, confirmation code: 255 410#

Callers are asked to register before 12:55 CET.

Interim financial statements
The interim financial statements are only prepared in English.

Oslo, 24 April 2014

Norske Skog
Communications and Public Affairs

|For further information: |
|Norske Skog media: Norske Skog financial markets: |
|Vice President Corporate Communication Vice President Investor Relations |
|Carsten Dybevig Tom Rogn |
|Mob: +47 917 63 117 Mob: +47 948 55 659 |

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

Q1 2014 Norske Skog press release
Q1 2014 Norske Skog presentation
Q1 2014 Norske Skog quarterly report


This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Norske Skog via Globenewswire


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