RusForest AB
RusForest Provides Operations Update
RusForest AB 31.10.2012 08:05 Dissemination of a Adhoc News, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- Stockholm, 2012-10-31 08:05 CET (GLOBE NEWSWIRE) -- RusForest AB (publ) ('RusForest' or the 'Company') (NASDAQ OMX: RUSF), a Swedish forestry company with operations in Russia, announces preliminary third quarter 2012 production results. RusForest increased harvesting of sawlogs by 97 percent from 131,806 cubic meters in the second quarter of 2012 to 259,063 cubic meters in the third quarter of 2012 due to seasonality and production improvement efforts. The Company increased production of sawnwood by 31 percent from 67,584 cubic meters in the second quarter of 2012 to 88,559 cubic meters in the third quarter of 2012 mainly due to a stable supply of raw material from harvesting operations. Transportation of sawlogs from harvesting operations in Russia is generally limited in April/May and September/October due to weather conditions and undeveloped road infrastructure in the forest. The log-hauling slowdown resulted in lower sawnwood production in the second quarter of 2012 and again in October 2012. RusForest's third quarter 2012 production is not comparable to third quarter 2011 due to acquisitions and construction. Garrett Soden, the Company's CEO, commented, 'Our third quarter production showed significant improvement from the seasonal slowdown in the previous period. We continue to address our short-term liquidity challenges by seeking additional credit facilities, reducing costs and selling non-core assets.' RusForest expects to report third quarter financial results on November 30, 2012. Management Update Effective October 31, 2012, Jeppe Strange has resigned as Chief Operating Officer ('COO'). Peter Nilsson, the Company's Director of Sales and Production, will assume the responsibilities of COO. RusForest is in the process of strengthening local management in key operating units. Third Quarter Production - Northwest Russia Arkhangelsk harvesting increased sawlog production by 71 percent from 36,709 cubic meters in Q2 2012 to 62,834 cubic meters in Q3 2012. The Arkhangelsk sawmill (LDK-3) increased sawnwood production by 19 percent from 29,565 cubic meters in Q2 2012 to 35,318 cubic meters in Q3 2012. The Shenkursk sawmill increased sawnwood production by 16 percent from 6,831 cubic meters in Q2 2012 to 7,906 cubic meters in Q3 2012. At the end of the third quarter, the new drying chambers were operational, and the final trimming of the new sawnwood sorting line was being finished, but construction delays limited production levels during the quarter. The supply of sawlogs at Shenkursk is tight because summer harvesting was low in the region and RusForest does not have its own harvesting nearby. Management is currently evaluating strategic options for Shenkursk. Third Quarter Production - Eastern Siberia Boguchany harvesting increased sawlog production by 240 percent from 36,967 cubic meters in Q2 2012 to 88,680 cubic meters in Q3 2012. During the third quarter, the Company deployed additional harvesting equipment purchased earlier in 2011 and 2012. The Boguchany sawmill increased sawnwood production by 79 percent from 15,543 cubic meters in Q2 2012 to 27,883 cubic meters in Q3 2012. New drying chambers and a boiler were launched in August 2012, and a new log sorting line was launched in September 2012. Construction and start-up of the dry sorting line for sawnwood is expected to be completed in Q4 2012. Ust-Ilimsk harvesting production remained low with 32,273 cubic meters of sawlogs produced in Q3 2012, compared to 30,750 cubic meters in Q2 2012. In order to reduce costs, Ust-Ilimsk harvesting operations are being outsourced, and some of the harvesting equipment is being relocated to Boguchany and Magistralny. As previously disclosed, the Ust-Ilimsk sawmill was leased to a third party in Q2 2012. Ust-Ilimsk sawnwood production is therefore not included in the consolidated production volumes for Q3 2012. Magistralny harvesting increased sawlog production by 275 percent from 27,381 cubic meters in Q2 2012 to 75,276 cubic meters in Q3 2012. During the third quarter, a new log loader arrived on site to remove a potential bottleneck. The Magistralny sawmill increased sawnwood production by 66 percent from 10,529 cubic meters in Q2 2012 to 17,452 cubic meters in Q3 2012. The main reason for the increase was de-bottlenecking and modernization of the sawline in June 2012 and a stable supply of sawlogs during the summer period. About RusForest AB RusForest is a Swedish forestry company operating in eastern Siberia and the Arkhangelsk region of Russia. The Company controls approximately 3 million hectares of timber through long-term leases with an annual allowable cut ('AAC') of approximately 3.6 million cubic meters. RusForest owns five sawmills in close proximity to its forest leases and is self-sufficient in raw material to produce more than 400,000 cubic meters per year of sawnwood products. The Company is listed on NASDAQ OMX Stockholm First North (ticker symbol 'RUSF'). RusForest's largest shareholder is Vostok Nafta Investment Ltd, which owns approximately 29 percent of the Company's shares. RusForest AB's Certified Adviser on First North is Pareto Öhman AB. For additional information, please visit the Company's website at www.rusforest.com or contact: Mia O'Connor, Investor Relations, telephone: +46 8 771 85 00 News Source: NASDAQ OMX 31.10.2012 DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: RusForest AB Sweden Phone: Fax: E-mail: Internet: ISIN: SE0001732728 WKN: End of Announcement DGAP News-Service ---------------------------------------------------------------------------
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