Interim report January-September 2019: Good result despite a slowdown in the market

Sveaskog's operating profit for the period January-September 2019 amounted to SEK 1,133 million (1,031), an increase of ten percent compared with the corresponding period 2018. The operating profit for the third quarter individually was also better and amounted to SEK 301 million (256).

January 1 - September 30, 2019:

• Net sales, which include both deliveries from own forest and externally procured forest raw material, increased by six percent to SEK 5,396 M (5,076). Prices increased by an average of nine percent, while total delivery volumes decreased by four percent. Sales from sales of forest plants have increased.

• Operating operating profit increased by ten per cent to SEK 1,133 M (1,031). Higher prices have to some extent been offset by lower volumes. The costs of forest management have increased. Last year's results were burdened by additional costs (SEK 25 million) linked to the extensive forest fires last summer. The result from other real estate transactions has decreased.

• The direct return, measured during rolling 12 months, was 5.4 percent (5.2).

• The reported change in value of growing forest amounted to SEK 426 M (206) net, the change in value has not had any cash flow impact

• Profit during the period January-September decreased by 19 percent and amounted to SEK 1,286 M (1,593), corresponding to SEK 10.86 (13.45) per share. The decrease is largely attributable to changed tax rules that had a positive impact on earnings of SEK 477 million last year. The effect was of a disposable nature and had no cash flow effect.

Comments from Sveaskog's President och CEO Hannele Arvonen:

Good results despite slowdown in the market

The improvement in earnings during the year is mainly due to higher prices for our products compared to the corresponding period last year, which has improved the margins for both deliveries from own forest and for externally procured forest raw material. However, delivery volumes are lower both overall and from our own forest. The costs of forest and nature conservation have increased mainly as a result of planned measures. We also have slightly higher logging costs, an effect of increased competition for logging resources in combination with logging of storm and insect-damaged forests.

The bark beetles continue to be a challenge

The bark beetles swarmed in a second round at the end of the summer. This represents a continued threat to our own and our suppliers' forests. An important priority in the autumn will therefore be to concentrate harvesting activities to bark beetle-infested areas. Due to the late swarming, many bark beetles to overwinter under the bark, making it even more imperative to implement control measures.

Our role in contributing to climate transition

An important task for us is how we best use the forest to farm and care for the forest and contribute to climate transition. We shall be a leader in exploiting and developing the role of forests in the circular bioeconomy. We must increase growth while meeting society's and our own environmental and sustainability goals for the forest.

New fuel agreements with higher environmental benefits

During the third quarter, Sveaskog signed a supplier agreement with Preem and Skoogs Fuel regarding propellants for their own machine teams, which in the long term ensures access to renewable fuels. The agreement means that Sveaskog estimates that its own fossil greenhouse gas emissions from fuel will be reduced by approximately 80 percent.

For more information contact:
Hannele Arvonen, President and CEO Svaeskog, +46 10 544 99 81
Per Matses, CFO Sveaskog, +46 8 655 92 90
Sveaskog's press service, +46 8 655 90 50, press@sveaskog.se

SVEASKOG is Sweden's largest forest owner and sells timber, pulpwood and biofuel. In addition, Sveaskog makes land transactions and develops the forest as a place for hunting, fishing and other nature experiences. The forest with its assets is Sveaskog's core business and sustainable development permeates everything that is done. Sales in 2018 were SEK 7 billion and the number of employees was approximately 846. Read more at www.sveaskog.com

Tags: