Södra reports its best result in history

Södra reports its best result in history

Södra’s consolidated net sales for full-year 2018 rose 18 percent to SEK 24,230 million (2018: 20,518), attributable to a favourable global economy, high demand and higher prices for paper pulp and sawn timber products. Operating profit for the year totalled SEK 4,508 million (2018: 1,917). The operating margin was 19 percent (2018: 9). 

2018 was characterised by high and stable demand for Södra’s products, the company reported. Price levels for both market pulp and sawn timber products remained at a favourable level and contributed to the result.

“The 2018 result is the best in Södra’s history. We were able to meet the strong demand for our products due to extensive investments of approximately SEK 11 billion in our pulp mills and sawmills, and new innovations over the past four years. We also completed efficiency improvements and restructured our operations. Södra has thus strengthened its competitiveness,” says Lars Idermark, President and CEO.

Consolidated net sales for the fourth quarter rose 12 percent to SEK 6,062 million, with year-on-year operating profit of SEK 974 million (2018: 530). The operating margin improved to 16 percent (2018: 10).

“Growth in the fourth quarter was also strong, but uncertainty increased with some signs of a slowing global economy and turbulence in financial markets,” said Lars Idermark.

In the fourth quarter, Södra acquired Bergviks Skog’s forest holding in Latvia for EUR 324 million. The Board decided to invest SEK 100 million in research related to forest growth and productivity.

“Access to fibre is crucial for our industry and the strategic role of forests has increased. We are also seeing a growing demand for forest products as the bioeconomy evolves,” says Lars Idermark.

Quarter Full-year
2018 2017 2018 2017
Okt-Dec Okt-Dec % Jan-Dec Jan-Dec %
Net sales, SEK million 6,062 5,413 12 24,230 20,518 18
Operating profit before depreciation,
amortisation and impairment, SEK million
1,264 835 51 5,654 3,009 88
Operating profit, SEK million 974 530 84 4,508 1,917 135
Profit before tax, SEK million 935 503 86 4,431 1,830 142
Operating margin, % 16 10 19 9
Return on capital employed, % - - 24 12
Equity ratio, %* - - 59 56

*These key indicators are not calculated quarterly.

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