On average, our per unit fiber costs in the current quarter decreased by approximately 8% from the same period in 2011, due to lower fiber costs in Germany caused by reduced demand from other regional residual fiber users and in British Columbia caused by increased chip supply resulting from increased regional sawmill activity. We currently expect fiber costs at our German mills to increase slightly in the short- to mid-term, primarily due to higher demand from pellet and board producers which has been compounded by winter weather conditions limiting wood supply, though we expect these costs to be partially offset by price decreases in Canada as a result of strong sawmill activity.

Selling, general and administrative expenses decreased to €9.6 million in the fourth quarter of 2012, compared to €11.4 million in the fourth quarter of 2011.

For the fourth quarter of 2012, operating income increased to €7.3 million from €3.0 million in the comparative quarter of 2011, primarily due to lower fiber costs and a stronger U.S. dollar against the Euro, partially offset by lower average pulp sales realizations.

Interest expense in the fourth quarter of 2012 decreased to €13.7 million from €14.1 million in the comparative quarter of 2011, primarily due to lower debt levels associated with the Stendal mill in 2012.

Our Stendal mill recorded an unrealized gain of €2.3 million on the interest rate derivative in the current quarter, compared to an unrealized loss of €0.8 million in the same quarter of last year. We also recorded a gain of approximately €0.1 million related to a series of fixed price pulp swap contracts entered into in 2012.

In each of the fourth quarters of 2012 and 2011, the noncontrolling shareholder's interest in the Stendal mill's loss was €1.2 million.

In the fourth quarter of 2012, Operating EBITDA increased to €21.3 million from €17.0 million in the fourth quarter of 2011. Operating EBITDA is defined as operating income (loss) plus depreciation and amortization and non-recurring capital asset impairment charges. Operating EBITDA has significant limitations as an analytical tool and should not be considered in isolation or as a substitute for our results as reported under GAAP. See page 10 of the financial tables included in the press release for a reconciliation of net income (loss) to Operating EBITDA.

If you liked this article you might like

Analysts' Actions -- Chipotle, 3D Systems, Lennox, Red Hat and More

3 Hold-Rated Dividend Stocks: DMLP, TGH, MERC

Mercer International (MERC) Is Weak On High Volume Today

Insider Trading Alert - MERC, MKL And CKP Traded By Insiders

Mercer International (MERC) Is Today's Strong On High Volume Stock