Wednesday, April 27, 2022
Södra posted a very strong result for the first quarter of 2022. The result reflects the favourable market conditions for Södra’s core products, while global turmoil is creating uncertainty about the future.
In the first quarter of 2022, net sales for the Södra Group amounted to SEK 8,165 million (5,733), up 42 percent year-on-year. Operating profit totalled SEK 1,974 million (547), representing an operating margin of 24 percent (10). Return on capital employed was 36 percent (10) and the equity ratio increased to 64 percent.
The first quarter result reflects the favourable market conditions, with strong demand and highly favourable prices for Södra’s core products in pulp and sawn timber. In addition, Södra’s mills produced high volumes with stable quality. Combined with high outbound delivery volumes where, for example, Södra Wood’s deliveries reached an historically high level during a single month of March, this provided the basis for the robust result.
“It is gratifying that Södra is standing strong in turbulent times. Due to the hard work of our employees, contractors and members, we handled the challenges in our forests and delivered favourable results in our mills. During the quarter, we increased the production of our core products, while prices and demand remained at very high levels,” said Lotta Lyrå, President and CEO.
Several initiatives during the quarter
In the first quarter, Södra worked to promote long-term ownership value and will continue to create sustainable and profitable growth.
Uncertainty about the quarters ahead
For the quarters ahead, the war in Ukraine and the effects this may have on Södra’s operations is causing market uncertainty.
“We expect the market outlook to remain positive in the short term, but are concerned about the deepening global turmoil. We are mindful of the global situation and the challenges this is presenting,” said Lotta Lyrå.
Business areas’ results for the first quarter of 2022
In the Södra Skog business area, operating loss totalled SEK 6 million (profit: 23) for the period.
In the Södra Wood business area, operating profit totalled SEK 762 million (378) for the period. The earnings improvement was due to higher volumes combined with highly favourable prices for sawn timber.
In the Södra Cell business area, operating profit totalled SEK 1,431 million (378) for the period. The earnings trend was due to improved prices for pulp. Production volumes increased during the quarter.
In the Södra Innovation business area, operating loss totalled SEK 15 million (loss: 54) for the period. The change in earnings was mainly attributable to a stronger result in SunPine and recognition of the holding in Silva Green Fuel as shares in partnerships.
Tags: 2022, Covid-19, Pulp mill, sawmill, Sodra, sodra wood, woodworking and manufacturing, woodworking industry
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