Stora Enso's Forest Associate Bergvik Skog Sells Forestland in Latvia and Increases Fair Values of Biological Assets

Stora Enso's Forest Associate Bergvik Skog Sells Forestland in Latvia and Increases Fair Values of Biological Assets

PR Newswire

HELSINKI, Nov. 13, 2018

HELSINKI, Nov. 13, 2018 /PRNewswire/ --Bergvik Skog AB, a Swedish forest holding company, has divested its ownership in its subsidiaries in Latvia where the company owned a total of 0.1 million hectares of forest land. Stora Enso owns currently 49.8% of Bergvik Skog. 

The transaction was finalised today, 13 November 2018. The selling price of the assets was EUR 324 million, and the gain on disposal net of transaction costs and taxes totalled approximately SEK 978 (EUR 95) million. Stora Enso's share of the gain is approximately SEK 487 (EUR 47) million, subject to normal closing verification and currency movements. The gain will be booked as an item affecting comparability (IAC) in the fourth quarter 2018 results. The total area in the Latvian forest is 111 000 ha, whereof 80 000 ha is productive forest land.

The IFRS fair value of the biological assets, i.e. growing trees, of Bergvik Skog has increased, net of tax, approximately SEK 1 313 (EUR 128) million compared to 2017. This includes approximately SEK 390 (EUR 38) million for the biological assets in Latvia. Stora Enso's share of the increase in 2018, net of tax, is approximately SEK 654 (EUR 64) million subject to normal year-end verification. Approximately SEK 148 (EUR 15) million of the increase was already reflected in Stora Enso's January–September IFRS operating profit and SEK 506 (EUR 49) million will be included in the IFRS operating profit in the fourth quarter of 2018. The change in the fair value was due to a decrease in the discount rate, inflation, and changes in the harvesting plan and price forecast.

The gain on disposal and the increase in fair value will impact the Group's IFRS operating profit in 2018. The IAC and fair valuation do not impact Stora Enso's operational EBIT.

As previously announced, Stora Enso is in a process of restructuring its ownership in Bergvik Skog. The divestment of the Latvian assets is part of the restructuring plan agreed among the shareholders. As a result of the planned restructuring, Stora Enso plans to transform its current ownership of 49.8% in Bergvik Skog, to a direct holding of approximately 70% of the value of the forest assets in Bergvik Väst. The negotiations are progressing in accordance with the Letter of Intent signed in November 2017. The aim of the negotiations is to find a binding agreement leading to that the main restructuring can be finalised during the first half of 2019. There are no negative effects expected on wood sourcing in 2019.

For further information, please contact:
Ulrika Lilja
EVP, Communications
tel. +46-72-221-9228

Investor enquiries:

Ulla Paajanen
SVP, Investor Relations
tel. +358-40-763-8767

Part of the bioeconomy, Stora Enso is a leading global provider of renewable solutions in packaging, biomaterials, wooden constructions and paper. We believe that everything that is made from fossil-based materials today can be made from a tree tomorrow. Stora Enso has some 26 000 employees in over 30 countries. Our sales in 2017 were EUR 10 billion. Stora Enso shares are listed on Nasdaq Helsinki (STEAV, STERV) and Nasdaq Stockholm (STE A, STE R). In addition, the shares are traded in the USA as ADRs (SEOAY). storaenso.com

STORA ENSO OYJ 

CONTACT:

For further information, please contact:
Ulrika Lilja
EVP, Communications
tel. +46-72-221-9228

Investor enquiries:
Ulla Paajanen
SVP, Investor Relations
tel. +358-40-763-8767

This information was brought to you by Cision http://news.cision.com

http://news.cision.com/stora-enso-oyj/r/stora-enso-s-forest-associate-bergvik-skog-sells-forestland-in-latvia-and-increases-fair-values-of-b,c2670703

The following files are available for download:

http://news.cision.com/stora-enso-oyj/i/forest,c2526743

Forest

Voltar noticias em Inglês