02.02.2011

Nordic markets were sharply lower for the day with Oslo being the exception. Egyptian President Hosni Mubarak said he will not seek re-election this autumn. Tensions escalated as pro-Mubarak supporters engaged the anti-Mubarak demonstrators. The United States is calling for Mubarak to go now instead of later. A major tropical cyclone is hitting already flood ravaged Queensland in Australia. Investors were sweating rumours of another rate hike in China. Since today is Chinese New Year's Eve, such a thing coming in the aftermath of the celebrations would not be all too odd. Private payrolls increased more than expected in the United States.

Novo Nordisk operating profit grew by 27% in 2010 to 14.4 billion DKK and sales by 19% in Danish kroner to over 60 billion. Victoza, NovoRapid and Levemir were the main drivers of sales growth. For this year Novo Nordisk expects 8-10% sales growth in local currencies and around 15% operating profit margin. Investors booked profits after a run-up to the report earlier and Novo closed down minus 2.1%.

Renewable Energy Group shot up after warning that fourth quarter results will be significantly above expectations.Both revenue of 4.9 billion NOK and EBITDA of 1.8 billion overwhelm consensus estimates, the profit part by as much as 50 per cent. A stronger than expected market and fewer than normal close-downs were the main drivers behind the positive result. REC gained a stunning 13.66% for the day.

Nordea made more than a billion Euros worth of profit in fourth quarter of 2010. That was a record as were the income levels. There was growth in all customer segments and credit losses were down sharply. Despite all of this the stock market reaction was negative as well.

UPM Kymmene fourth quarter profit of 178 million Euro bested most expectations and the company has now been able to hike paper prices. UPM also commented on the effect that the situation in North-Africa may have on its sawmill results. Nordic pulp & paper sector companies have major stake and cargo in the area, with as much as 20 percent of sawmill revenue coming from
the area. Profit taking pushed the stock down over 3%.

Holmen has decided to close a paper machine in Madrid. Newsprint demand is a little bit better and the company expects substantial price increases in 2011. Operating profit was around 1.6 billion SEK for 2010, down a little.

Sandvik said that the positive trend continued in the fourth quarter.Mining and energy segments are the best performing for the company. Net working capital target was reached and this together with improved margins generated improved ROCE and cash flow numbers. The markets were expecting even more though and the stock continued recent slide.

Compressors, construction and mining equipment manufacturer Atlas Copco's interim report contained news of record profit and continued order backlog growth. The Board of the company proposes 9 SEK per share cash distribution to shareholders consisting of 4 SEK per share annual dividend and an extra distribution of 5 SEK per share through mandatory redemption. The near-term outlook was not most convinsingly worded as overall demand is expected to increase "somewhat" The company has also decided to build a new RD center in Nanjing.

Scania's sales and cash flow were very good but the market had been expecting better margins. The operating income was 12 billion SEK for the year.Electrolux made its new record as well with the current structure. The operating margin target was reached. The company felt some price pressures for Q4 and expects modest growth in 2011. The Q4 net sales amounted to 27.5 billion SEK with 677 million profit. The invertors focused on the negatives (raw material prices and dividend) and Electrolux backed over 7%.

Outokumpu losses were relatively heavy in Q4, like the company warned a few weeks ago. The company is expecting to break even or to eek a small plus on Q1 after having seen considerable orders pickup. Managing to just about break-even in a clearly better business environment is not a terrible good sign.

Tecnotree reported increasing losses. This was not such a great surprise after yesterday's report of internal conflict. There were very little comments concerning the issues that came to light yesterday in today's quarterly report. Undoubtedly we will hear more of it, also from the Indian side in the near future and the mounting losses and comments from the company of unveiling new strategy in the near future do not go towards convincing investors.

Fortum's de-risking cost a large chunk of the profits that were ripe for the taking as the economic recovery was much stronger than the company had expected. Instead of the presumed improvement, Fortum's profit was thus down considerably. Most parties seem amicable to giving Fortum the permission to replace Loviisa nuclear plants. Fortum backed around 4%.

Norwegian power company Hafslund Q4 profit rinted at a hair over 1 billion NOK, up from negative numbers the year before. Expectatations of good news in upcoming capital markets day pushed Nokia up 4%. Fabege did not manage to build on earlier real-estate sector positive surprises in Q4 report and was down 4%.