Papermaker Norske Skog posts larger loss for 1Q

The Oslo-based group said it lost 966 million kroner ($189 million) in the January-March period compared with a loss of 910 million kroner a year earlier.

Revenue fell almost 10 percent to 6.27 billion kroner ($1.23 billion).

"Seasonal fluctuations add to the weak result. However, the strong cost growth, combined with a weak price development for newsprint in Europe, is the largest challenge facing Norske Skog," said company chief executive Christian Rynning-Toennesen.

It said a decline in demand for newsprint in North America, Europe and Australasia had been partly offset by increases in South America and Asia.

Norske Skog has repeatedly announced production cuts, layoffs and restructuring over the past two years as the paper industry adapts to falling demand and prices, coupled with higher costs.

The company said it will carry out cost and debt cutting plans announced in March that include shutting down production, cutting staff at its Oslo headquarters and abandoning a project to move one of its paper-milling machines to Brazil from a mill that it shut in Norway in 2006 due to high costs.

The group said during the second quarter it will shut down one paper machine at a Norwegian mill, and close the Norske Skog Steti mill in the Czech Republic. It said the Norske Skog Cheongwon unit in South Korea will also be closed, but the timing has yet to be decided.

Norske Skog has 19 paper mills in 14 countries, and claims a production capacity of about 11 percent of the world's newsprint and about 5 percent of world magazine paper.

Although formally listed as Norske Skogindustrier ASA, it asks to be called Norsk Skog.

Shares in the group rose 10.6 percent to close at 25.60 kroner ($5.02) on Thursday in Oslo. The report was in line with a profit warning Norske Skog issued in March that caused its share price to fall nearly 9 percent.

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