Price increases in Australia and higher sales volumes resulted in “significantly better” financial results for Norske Skog, the newsprint maker says.

Gross operating earnings were NOK 469 million in the third quarter, the improvement over the second quarter due to lower costs, higher volumes and better prices. The company says cash flow from operations also improved markedly, and net interest-bearing debt was reduced.

President and chief executive Sven Ombudstvedt says the result shows a positive change after a rough period: “Even so, we remain committed to doing everything possible to turn Norske Skog into a company showing satisfactorily profitability.

“It is still necessary to align our European production capacity with future demand,” he says.

The net loss was NOK 1,841 million, compared to a loss of NOK 280 million in the second quarter of 2011 and a loss of NOK 244 million in the third quarter of 2010, and the company says net interest-bearing debt was reduced from NOK 8.4 billion to NOK 8.1 billion during the quarter.

Ombudstvedt says sales prices during the quarter increased markedly from the same period last year, and there were also some price increases compared to the second quarter this year. While production volumes were in line with the second quarter, deliveries were somewhat lower than in the preceding quarter.

Costs were “somewhat lower” compared to the second quarter, but still at a high level compared to the third quarter of 2010.

Outside Europe, positive results in Australasia were set against weak ones in South America.

An improvement in third quarter gross operating earnings was caused by price increases in Australia and higher sales volumes. A decline compared with the same period last year was mainly due to a positive one-off item at Norske Skog Boyer in the third quarter last year.

Lower gross operating earnings in South America largely resulted from a weakened Brazilian real, although an increase in production volumes resulted in a very high capacity utilisation of 97 per cent.

Ombudstvedt says stable prices and volumes for newsprint and magazine paper are expected in the fourth quarter, with input costs are expected to remain high, despite lower prices for market pulp and recovered paper.

Gross operating earnings for the year are expected to be “somewhat stronger” than in 2010.