Monday, July 29, 2024
In the second quarter of 2024, the Södra Group reported net sales of SEK 7,527 million, a 3 percent increase from SEK 7,322 million in the same period the previous year. Operating profit amounted to SEK 398 million compared to SEK 464 million, yielding an operating margin of 5 percent versus 6 percent.
The return on capital employed was 8 percent, down from 13 percent, and the equity ratio stood at 60 percent. Södra posted a stable result for the second quarter of 2024. Several important decisions were made during the quarter in line with Södra’s strategy to increase the added value of its wood raw material and maximise the utility of each tree.
Södra delivered a stable result that was just ahead of expectations in the second quarter. The result was positively impacted above all by high pulp prices and good cost control, while it was burdened by higher raw material prices and costs of approximately SEK 275 million for scheduled maintenance shutdowns at Värö and Mörrum” said Lotta Lyrå, President of Södra.
New business increases added value from every tree
Södra’s strategy aims to maximise the value of every tree in the members’ forests. In the second quarter, Södra made important decisions to this end through the establishment of two new businesses: kraft lignin and tannin.
“Our assignment is to refine and renew the value of family forestry. Södra is continuing to do more with each tree and delivering products and solutions that facilitate the climate transition and strengthen the profitability of family forest owners. Sustainability and profitability should go hand in hand and this quarter has provided two excellent examples of how Södra is working on these very subjects,” said Lotta Lyrå.
Södra is investing over SEK 2 billion in a kraft lignin production facility in Mönsterås, set to be operational by 2027, which will position Södra as the world’s largest kraft lignin producer. There is significant interest in kraft lignin, with agreements already in place with customers for a substantial portion of the future production volume. This investment is financed through Södra’s own funds, cash flow from operating activities, and support from the Swedish Energy Agency. Additionally, Södra is investing in a tannin production line at Värö, expected to be operational by 2026.
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