Ilim Group posts losses for Q1
MOSCOW. Aug 9 (Interfax) - Ilim Group closed the first quarter of 2010 with losses, which were also post in both the previous quarter and the same period of 2009, U.S. company International Paper, the parity shareholder in Ilim, said in its financial reporting.
International Paper's results for Ilim include a quarterly lag owing to the Russian group's complex organization and the need to tabulate results in accordance with American requirements. International Paper, it is report for the second quarter (published on Monday) included revenue from its 50% stake in Ilim excluding taxes coming to $5 million compared to $3 million in losses for the pervious quarter and $30 million for the year previous.
Ilim's sales in the first quarter went up thanks to rising cellulose and packaging carton supplies. In addition, market prices for both cellulose and end production increased primarily thanks to rising demand from China, International Paper said. However, Ilim's costs went up owing to tariff indexation for power suppliers and railway carries, as well as the increasing cost of wood pulp following an anomalously cold winter.
According to International Paper's estimates, Ilim's share in the corporation's financial result could increase in the second quarter thanks to positive international trends and more effective use of wood pulp and chemical production.
International Paper is not revealing Ilim's sales revenue. However, the corporation's overall result for the second quarter increase to $6.1 billion from $5.8 billion a year previous.
International Paper also said that Ilim Group's investment program foresees investment of $1.5 billion in the development of three pulp and paper plants over a five-year period. A total of $700 million will be used for developing a new line at the Bratsk pulp and paper plant and $270 million for paper production units at the company's branch in Koryazhm in the Arkhangelsk Region. This program will be financed through loans and Ilim's own resources.
The Russian shareholders in Ilim, Zakhar Smushkin and brothers Boris and Mikhail Zingarevich formed a joint venture with International Paper in the autumn fo 2007. The company was renamed from Ilim Pulp to Ilim Group.