July 26, 2021 - SCA on July 23 reported strong second quarter 2021 earnings on higher pricing and low input costs.
Earnings for the second quarter of 2021 were the highest since the distribution of Essity in 2017 and represent a significant improvement compared with the preceding and year-earlier quarters. Higher selling prices, higher production and stable, low costs in all product areas had a positive impact on earnings.
The supply of wood to SCA's industries was stable throughout the quarter. Prices for timber and pulpwood were stable compared with the preceding period.
The market situation for solid-wood products continued to strengthen, driven by increased global demand in the building materials trade and construction industry. Sustained strong demand has led to a continuation of low inventory levels and significantly increased market prices.
During the period, selling prices for pulp increased further, especially in Europe and the US. Delivery volumes increased slightly compared with the preceding quarter. Global inventory levels were normal.
Demand for kraftliner continued to strengthen, driven by high box demand. The average selling price was higher than the preceding quarter.
Operating cash flow was strong and has financed SCA's ongoing growth projects - to expand kraftliner manufacturing in Obbola and to increase production of chemically pre-treated mechanical pulp (CTMP) at the Ortviken site. The investment projects are progressing on time and on budget.
SCA has based the valuation of its forest assets in Sweden on forest transactions in the areas where SCA owns forest assets. The market value of the forest assets increased during the first six months of 2021. At June 30, the average market price applied to SCA's forest assets was SEK 300/m³fo. When applied to SCA's standing timber volume, the total value of SCA's forest assets was SEK 76.6bn. At December 31, 2020, the market price was SEK 291/m³fo and the total value of SCA's forest assets was SEK 74.9bn.
Based in Sundsvall, Sweden, SCA consists of five business units: Forest, Wood, Pulp, Paper, Renewable Energy, and its supporting unit Sourcing & Logistics. SCA's forestry operations manage SCA's forest holding with 2.6 million hectares of forest land in northern Sweden and 50,000 hectares in Estonia and Latvia. To learn more, visit: www.sca.com.
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