Södra delivers robust result in uncertain times

 Tuesday, July 19, 2022

Despite market uncertainties, Södra announced a robust result for the second quarter of 2022. The result reflects the sustained strong market for Södra’s core products in pulp and sawn timber, but the market outlook is highly uncertain.

In the second quarter of 2022, net sales for the Södra Group amounted to SEK 8,953 million (7,287), up 23 percent compared with the year-earlier period. Operating profit totalled SEK 2,325 million (1,326), the highest quarterly result for Södra to date.

Operating profit for the first half of 2022 totalled SEK 4,299 million (1,873). Return on capital employed was 39 percent (18), and the equity ratio was 61 percent at the end of the period. The second-quarter result reflects the favourable market conditions, with strong demand and highly favourable prices for Södra’s core products, primarily pulp. In addition, Södra’s mills delivered high production volumes with stable quality and Södra Cell, for example, increased both production volumes and outbound deliveries during the period.

Business area results for the second quarter of 2022

• In the Södra Skog business area, operating profit for the period totalled SEK 39 million (61). The change in earnings was primarily due to higher fuel costs.
• In the Södra Wood business area, operating profit for the period totalled SEK 866 million (827) and reflects the sustained favourable prices for sawn timber. At the same time, demand for sawn timber decreased during the quarter.
• In the Södra Cell business area, operating profit for the period totalled SEK 1,696 million (662). The earnings improvement was due to a considerably stronger price level for pulp and a favourable exchange rate for Södra, while both production volumes and outbound deliveries increased.
• In the Södra Innovation business area, operating profit for the period totalled SEK 20 million (loss: 43). The positive trend was due to a favourable performance by SunPine and the fact that Södra’s holding in Silva Green Fuel is now recognised as profit from shares in partnerships and charged to net financial items.

Tags: 2022, COVID, pulp and paper, Sodra, wood and panel, woodworking and manufacturing, woodworking industry, woodworking UK