Monday, October 28, 2024
Södra delivered a robust performance in the third quarter of 2024, driven by key strategic decisions aimed at enhancing its competitiveness and sharpening its commercial focus. During the quarter, the Södra Group reported net sales of SEK 6,944 million, a 6 percent increase from SEK 6,545 million in the same period last year. Operating profit soared to SEK 937 million, more than doubling from SEK 410 million, resulting in an improved operating margin of 13 percent, compared to 6 percent last year. The return on capital employed was 10 percent, with an equity ratio of 61 percent.
“Södra posted a strong result for the third quarter of the year. We are positively impacted, above all, by high pulp prices and continued good cost control, but challenged by high raw material prices and the prevailing global uncertainty, which also affects market demand and logistics,” said Södra’s President and CEO Lotta Lyrå.
For sawn timber, weak construction activity continued to affect the market, but prices were maintained due to lower supply. The strong result for paper pulp was mainly due to stable market prices and demand remained positive in relation to supply. The scheduled maintenance shutdowns at the pulp mill in Mönsterås during the fourth quarter will, however, result in both increased costs and a loss in production.
Södra always delivers world-class efficiency – their way of working with continuous improvements – generated improvements and efficiencies during the quarter with an annual recurring effect of SEK 104 million.
Commercial focus increases the added value from each tree
In the third quarter, important decisions were made to strengthen Södra’s competitiveness and commercial focus by establishing our operations for energy, chemicals and CLT as separate business areas. The changes are taking place as part of the implementation of Södra’s strategy to make more from every tree and to continue refining and renewing the value of family forestry.
“Our energy, chemicals and CLT operations have made considerable progress and it’s now time to give them more scope alongside of our existing core business areas. These are important changes to further increase the added value from every tree, while also strengthening Södra’s competitiveness and our commercial focus,” said Lotta Lyrå.
During the quarter, Södra announced that we have signed agreements with UPM and Stora Enso for large volumes of the kraft lignin that we are expecting to place on the market in 2027.
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