Record-high result for Södra

Net sales for full-year 2018 rose 18 percent to SEK 24,230 million with operating profit of SEK 4,508 million, the best in Södra’s history. The Board proposes a dividend of SEK 1,795 million. Return on capital employed was 24 percent. All business areas delivered a positive result.

Consolidated net sales for full-year 2018 rose 18 percent to SEK 24,230 million (20,518), attributable to a favourable global economy, high demand and higher prices for paper pulp and sawn timber products. Operating profit for the year totalled SEK 4,508 million (1,917). The operating margin was 19 percent (9). Return on capital employed rose to 24 percent (12) and the equity ratio was 59 percent (56). The Board proposes that the Annual General Meeting on 23 May approve a dividend of SEK 1,795 million (868) to members, corresponding to 41 percent of profit before tax.

2018 was characterised by high and stable demand for Södra’s products. Price levels for both market pulp and sawn timber products remained at a favourable level and contributed to the excellent result. Södra’s well-invested facilities delivered stable, high-quality volumes and could thereby capitalise on the continued favourable trend in global demand.

“The 2018 result is the best in Södra’s history. We were able to meet the strong demand for our products due to extensive investments of approximately SEK 11 billion in our pulp mills and sawmills, and new innovations over the past four years. We also completed efficiency improvements and restructured our operations. Södra has thus strengthened its competitiveness,” says Lars Idermark, President and CEO.

Consolidated net sales for the fourth quarter rose 12 percent to SEK 6,062 million, with year-on-year operating profit of SEK 974 million (530). The operating margin improved to 16 percent (10).

“Growth in the fourth quarter was also strong, but uncertainty increased with some signs of a slowing global economy and turbulence in financial markets,” said Lars Idermark.

In the fourth quarter, Södra acquired Bergviks Skog’s forest holding in Latvia for EUR 324 million. The Board decided to invest SEK 100 million in research related to forest growth and productivity.

“Access to fibre is crucial for our industry and the strategic role of forests has increased. We are also seeing a growing demand for forest products as the bioeconomy evolves,” says Lars Idermark.

See the video interview with Lars Idermark

  Quarter     Full-year  
  2018 2017      2018 2017  
  Okt-Dec Okt-Dec %   Jan-Dec Jan-Dec %
Net sales, SEK million 6,062 5,413 12   24,230 20,518 18
Operating profit before depreciation,
amortisation and impairment, SEK million
1,264 835 51   5,654 3,009 88
Operating profit, SEK million 974 530 84     4,508 1,917 135
Profit before tax, SEK million 935 503 86   4,431 1,830 142
Operating margin, % 16 10     19 9  
Return on capital employed, %* - -     24 12  
Equity ratio, %* - -     59 56  

*These key indicators are not calculated quarterly.

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

Founded in 1938, Södra is Sweden’s largest forest-owner association, with nearly 52,000 forest owners as its members. We conduct modern and responsible forestry, and operate state-of-the-art mills in which we process our raw material. In 2018, sales amounted to SEK 24 billion and employees totalled 3,100. Through value-generating relationships and a long-term approach, Södra shows the way for the next generation of forestry.

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Södra was founded in 1938 and is the largest forest-owner association in Sweden, with a membership of close to 52,000 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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The 2018 result is the best in Södra’s history. We were able to meet the strong demand for our products due to extensive investments of approximately SEK 11 billion in our pulp mills and sawmills, and new innovations over the past four years. We also completed efficiency improvements and restructured our operations. Södra has thus strengthened its competitiveness.
Lars Idermark, President and CEO.