Sodra Reports Dip in 2009 Profit on Weak First Half

Feb. 4, 2010 - Sodra said that its profit for 2009 declined by SEK 34 million to SEK 662 million compared to 2008. Revenue declined by SEK 297 million to SEK 16,696 million.

The Sweden-based pulp producer said that lower revenues were the result of a weak pulp market and poor pricing during the first half of 2009. However, pulp markets stabilized in the seconf half of the year and pricing improved.

"During the year we went from a situation of economic crisis to one more resembling a normal recession. Our production units have been running at full capacity since summer apart from shutdowns in conjunction with planned maintenance," said Sodra President and CEO Leif Broden.

"We have countered the economic fluctuations with measures in the areas we can affect. We have adapted our production rate. In addition, Sodra has performed extremely well in terms of productivity development. In 2009 we implemented 3,400 improvement suggestions from Sodra employees, the total effect of which represents an annual profit improvement of SEK 93 million," Broden said.

"The total average productivity improvement for the Group was 1.7 per cent, with variations between business units. Sodra Timber, for example, increased its real productivity by more than 5 percent," Broden added.

In a written press statement, Sodra said that after the initial crisis, the second half of the year was characterized by low pulp inventories at producers as well as buyers. In particular, robust demand in China contributed to the stronger balance on the pulp market and the strengthening of Sodra Cell's profit in the second half-year.

This situation with a balanced market and low pulp inventories still prevails. Pulp inventories at European producers in December were down to 16 days, the company said.

Sodra has an annual pulp production capacity of over 2 million tonnes per year 80 percent softwood and 20 percent hardwood grades. The company operates five mills; three in Sweden and two in Norway.


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