Sustained strong result for the second quarter

Södra reported sustained strong operating profit of SEK 1,318 million (461) for the second quarter, the best quarterly result ever. The market trend was positive for all of Södra’s product categories and completed investments, efficiency improvements and restructuring are reflected in the result.

“The strong result is mainly due to the favourable global economy, with high demand and a positive price trend for our products in both market pulp and the sawn timber area. We are also seeing the positive effects of our expansion investments, with higher production volumes at our pulp mills,” said Lars Idermark, President and CEO.

“The efficiency improvements and restructuring we have achieved in our sawn timber production also generated profit effects. In the second quarter, we decided to discontinue our operations in the Interior Wood segment. We are also making aggressive investments in other areas, such as cross-laminated timber (CLT),” said Lars Idermark.

“We are seeing growing demand for liquid biofuels made from woody biomass, and our investments to increase liquid biofuel production will continue. These are key investments for our future and are helping to create new business,” said Lars Idermark

Consolidated net sales for the second quarter rose 26 percent year-on-year to SEK 6,626 million (5,244), and the operating margin strengthened to 20 percent (9). For the first half-year, operating profit totalled SEK 2,257 million (951) – the strongest half-year figure in Södra’s history. Return on capital employed rose to 26 percent (12) and the equity ratio was 57 percent (55).

In the Södra Skog business area, operating profit totalled SEK 49 million (37) for the period. The result was impacted by continued weather challenges. Following a cold and snowy winter that made transportation difficult, the dry conditions of recent months have increased the fire danger and significantly impacted forest operations.

In the Södra Wood business area, operating profit totalled SEK 210 million (76) for the period, mainly reflecting the positive price level for sawn timber but also the ongoing restructuring process. The result refers solely to the sawmill operations, since the Interior Wood segment has largely been discontinued and is now reported under Other segments.

In the Södra Cell business area, operating profit totalled SEK 1,196 million (416) for the second quarter. The profit trend was mainly attributable to the high price level, a favourable USD exchange rate and the higher volumes enabled by expansion of the pulp mill at Värö.
 

Watch the video interview with Lars Idermark
 

April-June 2018 in brief: 2018 2017 2018 2017
  Apr-Jun Apr-Jun Jan-Jun Jan-Jun
Net sales, SEK million 6,626 5,244 12,343 10,342
Operating profit before depreciation, amortisation and impairment, SEK million 1,615 724 2,832 1,474
Operating profit, SEK million 1,318 461 2,257 951
Operating margin, % 20 9 18 9


For questions, please contact:
Lars Idermark, President and CEO, Södra
Tel: +46 (0)470 894 35

Anna Belfrage, CFO Södra
Tel: +46 (0)470-890 40

Södra’s Pressroom,
Tel: +46 (0)470-890 90
E-mail: press@sodra.com

Södra was founded in 1938 and is the largest forest-owner association in Sweden, with a membership of more than 51,000 forest owners. We engage in modern and responsible forestry, and operate state-of-the-art mills in which we process our raw material. Net sales in 2017 were 20.5 SEK billion and there were 3,400 employees. Through value-generating relationships and a long-term approach, Södra is leading the way for the future of sustainable forestry.

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Södra was founded in 1938 and is the largest forest-owner association in Sweden, with a membership of more than 51,000 forest owners. Södra is also an international forest industry Group, with 3,400 employees around the world. Net sales in 2017 were 20.5 SEK billion. Balancing production efficiency with nature conservation guides everything that we do. We produce timber, interior wood products, pulp for paper and textiles, and green energy. We use every part of the tree, and are always looking to develop new products from this fantastic, renewable raw material. Södra is a world-leading producer of market pulp and also owns one of the largest sawmill operations in Europe. Through value-generating relationships and a long-term approach, Södra is leading the way for the future of sustainable forestry.

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