Monday, February 16, 2026
The forestry cooperative reported net sales of SEK 28,302 million for 2025, down 4 percent from SEK 29,487 million the previous year. Operating loss totalled SEK 1,290 million, a sharp reversal from the SEK 2,630 million profit recorded in 2024. The operating margin declined to negative 5 percent, compared with a positive 9 percent a year earlier.
Return on capital employed stood at negative 5 percent at year-end. The equity ratio decreased to 56 percent from 62 percent.
Earnings deteriorated by SEK 3.4 billion year-on-year. Management attributed the decline to a combined impact of higher raw material costs, adverse exchange rate movements and weaker demand. This so-called “triple effect” reduced earnings by approximately SEK 4 billion. Of that, SEK 2.2 billion stemmed from higher raw material prices and SEK 1.8 billion from exchange rate effects.
Margins were squeezed significantly. Contribution margin fell to 24 percent, down from 33 percent at the beginning of 2025.
The external environment proved difficult. Demand softened in several segments. Currency volatility added pressure. Input costs remained elevated.
Despite the downturn, action was taken. A far-reaching cost and competitiveness programme was launched during the year. Its full financial impact has not yet been reflected in reported earnings.
Operational efficiency was prioritised. Overheads were reduced by SEK 380 million. Pulp production reached a record 1.9 million tonnes. Sawing yield improvements strengthened performance in the wood products division. Cost savings of SEK 518 million were generated under the World-class Efficiency programme, exceeding the original target.
Clear operational milestones were achieved. However, market conditions remained challenging.
President and CEO Lotta Lyrå stated that the company focused firmly on controllable factors. Production records were set. Efficiency initiatives were accelerated. Workstreams in digitisation, AI and automation were expanded. Yet the scale of external pressures outweighed these improvements.
Strategic investments continued. A decision was taken regarding the Kinda sawmill project. Construction of a kraft lignin plant in Mönsterås was initiated. Both investments align with the strategy of extracting greater value from each harvested tree. Renewable and low-carbon product development remains central to long-term positioning.
Balance sheet discipline was reinforced. The forest holding in the Baltics is being divested to sharpen focus on members’ forests in Sweden. The move is expected to strengthen financial resilience and improve capital allocation.
Sustainability targets were also met. The association achieved its goal of placing 3,000 hectares under nature conservation measures. Biodiversity commitments were thereby strengthened. Long-term stewardship remains embedded in the cooperative model.
The Board has proposed a profit distribution of SEK 616 million. This includes up to SEK 560 million linked to wood deliveries and a SEK 56 million bonus issue, equivalent to 2 percent. The proposal aims to balance member returns with financial stability. A decision will be taken at the Annual General Meeting in Jönköping on 2 June.
Of the proposed distribution, SEK 190 million relates to standard saw logs, corresponding to SEK 87 per cubic metre sub. Pulpwood accounts for SEK 162 million, or SEK 45 per cubic metre sub. Other wood deliveries represent SEK 208 million, equivalent to 6 percent.
Chair Magnus Hall stated that the distribution level was deliberately measured. Financial robustness has been prioritised. Investment capacity must be safeguarded.
Business area performance reflected the broader market slowdown.
Södra Skog reported an operating loss of SEK 14 million, compared with a profit of SEK 513 million in 2024. Volumes were slightly lower, mainly due to reduced energy product sales. Demand for sawlogs and pulpwood remained generally stable, although it weakened towards year-end, except for spruce logs.
Södra Wood posted an operating loss of SEK 463 million, compared with a modest SEK 23 million profit the previous year. Higher delivery prices were recorded. However, volumes declined and sawlog costs rose significantly.
Södra Cell delivered an operating loss of SEK 258 million, versus a profit of SEK 2,867 million in 2024. Unfavourable exchange rates and higher raw material costs weighed heavily on results. Increased volumes partially offset these pressures.
Södra Building Systems reported an operating loss of SEK 168 million, compared with a loss of SEK 157 million the year before. Higher raw material costs were partly mitigated by stronger invoicing volumes.
Sales generated within Södra Bioproducts are reported within other business areas. The unit recorded sales of SEK 3,553 million, compared with SEK 3,818 million in 2024.
The year tested resilience. Structural adjustments were implemented. Strategic investments continued. Cost controls were intensified.
Much of the recovery now depends on external factors. Demand trends will be decisive. Currency movements remain critical. Raw material pricing must stabilise.
Södra enters 2026 focused on competitiveness. Efficiency gains are expected to strengthen margins over time. Financial discipline has been reinforced. The cooperative model remains intact.
The forest industry remains cyclical. However, long-term fundamentals for renewable materials are considered robust.
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Tags: Forestry, forestry cooperative earnings, Södra, Swedish forest industry, timber prices Sweden, wood products market 2025, woodworking and processing, woodworking industry, woodworking UK
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