"Södra delivered a stable result in the first quarter, providing a foundation for 2025 that we will carry forward." said Lotta Lyrå, President and CEO of Södra.
April 24, 2025 - Södra said that it delivered a stable result for the first quarter of 2025. The result is stable in view of market conditions and is in line with Södra's expectations.
In the first quarter of 2025, net sales for the Södra Group amounted to SEK 8,154 million (7,613), up 7 percent compared with the year-on-year period. Operating profit totaled SEK 439 million (568), where exchange-rate effects of just over SEK 180 million were charged to earnings compared with the year-earlier period. The result corresponds to an operating margin of 5 percent (7). Return on capital employed was 10 percent (7) and the equity ratio was 61 percent.
"Södra delivered a stable result in the first quarter, providing a foundation for 2025 that we will carry forward," said Södra's President and CEO, Lotta Lyrå. "Every day we are focused on what we ourselves can influence and what is more important than ever — to improve our efficiency, productivity and cost-awareness. High raw material prices are positive for members but continue to pose a challenge for the Group's industrial operations. The strengthening of the SEK against the USD has a major impact on Södra, which is also reflected in the quarter's results."
Demand for paper pulp in relation to supply has led to an upward price trend. The pressure on sawn timber due to high raw material prices was offset by increased productivity and price adjustments in several markets. The assessment is that there will be further price improvements ahead.
In the CLT (Cross-laminated timber) business, Södra noted a positive trend for orders received during the quarter. For Södra's bioproducts, volume and prices for solid fuels remained stable during the quarter, with a strong trend for both the business and the production of biomethanol.
The first quarter was characterized by concerns about the uncertainty surrounding the rapidly changing political decisions that could affect trade, particularly between the US and other markets. While Södra's exposure to the US is relatively minor, Södra is aware that the tariffs may have both a direct and indirect impact that extends beyond the US. Södra has already built up strong flexibility by being active across multiple markets. That allows the company to quickly adapt our plans and manage any risks.
The raw material situation in Götaland has changed considerably in recent years and affected the production of sawn products in the first quarter. To strengthen the competitiveness of its sawmills, Södra adopted a strategy focused on improving efficiency. During this period, the company worked actively with both maintenance and the achievement of this goal. To address the structural shortage of raw materials, Södra took concrete actions in both the long and the short term, along the entire value chain. It also launched a comprehensive business offer for forest owners including 'Highest Price, 60 Days' and 'Forest Owner Agreement,' which are two examples of recently introduced initiatives.
In the Södra Skog business area, operating profit totaled SEK 33 million (loss: 15) for the period. The earnings trend was mainly due to higher volumes and good cost control.
In the Södra Wood business area, operating profit totaled SEK 14 million (loss: 32) for the period. The earnings trend was mainly due to increased productivity and an upward price trend, while raw material prices also rose sharply.
In the Södra Cell business area, operating profit totaled SEK 538 million (780) for the period. The earnings trend was mainly due to favorable production and an upward price trend, but adversely impacted by a stronger SEK against the USD.
In the Södra Building Systems business area, operating loss for the period totaled SEK 37 million (loss: 39). The earnings trend was primarily attributable to sustained low volumes due to a weak construction market.
Operating profit for the Södra Bioproducts business area is included in other business areas. The business area's sales for the period amounted to SEK 1,249 million (1,203).
Södra is the largest forest-owner association in Sweden, with more than 50,000 family forest owners as members. Together, the members of Södra own a world-leading industrial operation that processes forest raw material into renewable products such as pulp, timber, building systems, energy and biochemicals.
SOURCE: Södra