Södra: Stable results and important strategic decisions in Q2 2024

Södra, Sweden's largest forest owners' association and an international forest industry group, reported stable financial results for the second quarter of 2024despite economic challenges. The company, whose operations are based on the processing of its members' forest raw material, has also taken important strategic decisions aimed at increasing the added value of wood resources.

Key figures:

- Net sales: SEK 7.527 billion (up 3% compared to the same period last year)
- Operating profit: SEK 398 million
- Operating margin: 5%
- Return on capital employed: 8%
- Equity ratio: 60%

Lotta Lyrå, President of Södra, says: "In the second quarter, Södra delivered a stable result, slightly above expectations. The result was mainly positively impacted by high pulp prices and good cost control, while it was adversely affected by higher raw material prices and costs of approximately SEK 275 million for scheduled maintenance at the Värö and Mörrum mills."

Challenges and opportunities in different market segments

The sawnwood market continues to be affected by the weak economy, although prices have held up due to low supply. Pulp demand remains positive relative to supply, despite the impact of scheduled maintenance shutdowns.

New business for added value

Södra has announced two new strategic initiatives aimed at maximizing the value of every tree in its members' forests:

1. Investment of more than SEK 2 billion in a kraft lignin production facility in Mönsterås, which will make Södra the world's largest producer of kraft lignin. The unit is scheduled to become operational in 2027.

2. Investment in a tannin production line at the Värö plant, planned to be launched in 2026.

"Our mission is to refine and renew the value of family forestry. Södra continues to do more with every tree and to offer products and solutions that facilitate climate transition and strengthen the profitability of family forest owners," Lotta Lyrå added.

Business segment performance in Q2 2024

- Södra Skog (Forest): operating profit of SEK 46 million
- Södra Wood (Wood): operating profit of SEK 128 million
- Södra Cell (Cellulose): operating profit of SEK 380 million
- Södra Innovation: operating loss of SEK 54 million

As the largest association of forest owners in Sweden, Södra plays a crucial role in the sustainable management of forest resources and in the development of new technologies for the optimal use of wood raw material.