Södra remains steadfast amid currency headwinds in 2025

 Monday, April 28, 2025

Södra produced an unvarying first-quarter 2025 outcome. Given the state of the market, the outcome is steady and meets Södra’s expectations. The Södra Group’s net sales for the first quarter of 2025 were SEK 8,154 million (7,613), which was 7% higher than the same time the previous year. Operating profit was SEK 439 million (568), with somewhat more than SEK 180 million in exchange-rate effects charged to earnings in comparison to the same quarter last year. The outcome is equivalent to a 5 percent operating margin (7). The equity ratio was 61 percent, and the return on capital utilized was 10 percent (7).

“Södra delivered a stable result in the first quarter, providing a foundation for 2025 that we will carry forward. Every day, we are focused on what we can influence and what is more important than ever – to improve our efficiency, productivity, and cost-awareness. High raw material prices are positive for members but continue to pose a challenge for the Group’s industrial operations. The strengthening of the SEK against the USD has a major impact on Södra, which is also reflected in the quarter’s results,” commented Södra’s President and CEO, Lotta Lyrå.

Demand drove pulp prices up; sawn timber faced raw material pressure, but saw offset with higher productivity. Price improvements expected. Positive orders for CLT; stable solid fuel volume and prices; strong biomethanol production trend. World-class Efficiency –  Södra’s way of working with continuous improvements – generated improvements and efficiencies during the quarter with an annual recurring effect of SEK 79 million.

Uncertainty around the world marked the start of the year
Concerns around the unpredictability of the swiftly shifting political decisions that may have an impact on trade, especially between the US and other markets, defined the first quarter. Even though Södra has very little exposure to the US, the group is aware that the tariffs could have an effect outside of the US, both directly and indirectly. Being active in a variety of markets has already given Södra a great deal of freedom. This enables us to promptly modify our strategies and control any hazards.

Götaland’s raw material shift affected sawn product production in the first quarter. Södra boosted sawmill competitiveness through efficiency improvements, focusing on maintenance and addressing raw material shortages with short and long-term measures across the value chain, including new offers for forest owners like ‘Highest Price, 60 Days’ and ‘Forest Owner Agreement.

Results for “business areas” in the first quarter of 2025

• Operating profit for the Södra Skog business sector for the period was SEK 33 million (loss: 15).
• Higher volumes and effective cost control were the primary drivers of the profitability trend.
• Operating profit in the Södra Wood business sector for the period was SEK 14 million (loss: 32). Increased productivity and an upward price trend were the primary drivers of the earnings trend; however, raw material prices also experienced a significant increase.
• The operational profit for the Södra Cell business area during that time was SEK 538 million (780). Positive production and rising prices were the primary drivers of the earnings trend, although a stronger SEK relative to the USD had a negative effect.
• For the period, the operational loss for the Södra Building Systems business area was SEK 37 million (loss: 39). A sluggish construction market was the main cause of the profits pattern, which was characterised by persistently low volumes.
• The Södra Bioproducts business area’s operating profit is included in other business areas. Sales for the company region during that period totaled SEK 1,249 million (1,203).

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