Södra Delivers Strong First Quarter 2019 Results
“Prices for the company's core products – market pulp and sawn timber – remained at a favourable level throughout the quarter, even though a certain price decrease was foreseeable." – Lars Idermark, President and CEO, Södra.
April 25, 2019 (Press Release) - Södra continues to deliver a strong result. Net sales for the first quarter of 2019 rose 11 percent to SEK 6,318 million and operating profit rose 22 percent to SEK 1,148 million. The result is due to favourable demand and continued high price levels, combined with production facilities that delivered an excellent performance. Södra is investing in a completely new production facility for cross-laminated timber at the bio-based combined plant in Värö.
In the first quarter of 2019, consolidated net sales rose 11 percent to SEK 6,318 million (5,717) and operating profit totalled SEK 1,148 million (938), up 22 percent compared with the year-earlier period. The operating margin improved to 18 percent (16) and return on capital employed was 22 percent (22).
“Despite signs of a slowing global economy, Södra's first quarter result was better than expected,” said Lars Idermark, President and CEO. “Prices for the company's core products – market pulp and sawn timber – remained at a favourable level throughout the quarter, even though a certain price decrease was foreseeable.”
Södra is following its strategy for sustained profitable growth and investing in a higher degree of processing in the Södra Wood business area. Södra's Board has decided to invest in a completely new production facility for cross-laminated timber with a production capacity of about 100,000 m³ at the bio-based combined plant in Värö.
“The growing popularity of timber structures is a key factor in the growing bioeconomy. Timber building systems also offer major production and environmental benefits,” said Lars Idermark.
Södra's Board has also made an investment decision for Trivselhus regarding a new high-volume house production facility in Landsbro, with a high level of automation, robotics and digitisation in the manufacturing process.
In the Södra Skog business area, operating profit totalled SEK 56 million (19) for the period. The result was positively impacted by both higher volumes and improved margins.
In the Södra Wood business area, operating profit totalled SEK 147 million (100) for the period. The result reflects a continued high price level for sawn timber which, in combination with restructuring effects in Södra Wood, had a positive impact on the earnings trend. Sales amounted to SEK 1,498 million (1,279).
In the Södra Cell business area, operating profit totalled SEK 1,112 million (926) for the period. The earnings trend was mainly attributable to a continued high price level, a favourable USD exchange rate and production facilities that delivered an excellent performance. Sales amounted to SEK 3,501 million (3,129).
Södra is Sweden's largest forest-owner association, with 52,000 forest owners as its members. Södra is also an international forest industry Group, with operations based on processing its members' forest products, such as softwood and hardwood pulp, and wood products. To learn more, please visit: www.sodra.com.