Sveaskog’s Year-end Report January-December 2019: Record results and billion dividends

October – December 2019

• Net sales decreased by four percent to MSEK 1,813 (1,895). Forest raw material prices fell by an average of three percent and total delivery volumes fell by two percent. Revenues from land leases have increased.
• The operating profit decreased by 10 per cent to MSEK 350 (391), mainly due to lower prices and lower delivery volumes.
• The reported change in value of growing forest amounted to a net MSEK -27 (1,491). The high figure for the previous year is largely attributable to a changed discount rate in last year’s calculation.The change in value has not had any cash flow effect.
• Profit for the quarter amounted to MSEK 272 (1,578), corresponding to SEK 2.30 (13.30) per share.

January – December 2019

• Net sales increased by three per cent to MSEK 7,209 (6,971). Prices of wood raw materials increased by four per cent on average, while total delivery volumes were down by three per cent. Revenue from sales of seedlings and land concessions has increased.
• Operating profit from continuing operations increased by four per cent to MSEK 1,483 (1,422). Higher timber prices have to some extent been counteracted by lower delivery volumes. Increased revenue from sales of seedlings and concessions had a positive impact while costs for forest management and harvesting have increased.
• The dividend yield was 4.9 per cent (5.4).
• The reported net change in value of standing timber was MSEK 399 (1,697). The high figure for the previous year is largely attributable to a changed discount rate in last year’s calculation. The change in value had no impact on cash flow.

• Profit for the year decreased by 51 per cent to MSEK 1,558 (3,171), or SEK 13.16 (26.78) per share. The decrease is largely due to a smaller increase in the value of standing timber as well as changed tax rules in the year 2018, which had a positive impact on earnings of MSEK 505. The effects was of a non-recurring nature and had no impact on cash flow.

Comments from Sveaskog's President och CEO Hannele Arvonen:

“Sveaskog's operating profit for the full year 2019 is the best so far for Sveaskog. A large part of the improvement compared to last year is explained by higher prices for our products, which has improved our margins.”

“Good and stable results in operations, combined with a strong capital structure, means that Sveaskog is a stable distributor to the owner, the Swedish state. The Board's proposal for the Annual General Meeting is a dividend of SEK 1.1 billion.”

“A good financial result, while showing great regard in forestry, means that we have a good starting point for 2020. We continue our work with continuous improvements and high quality in our forest management.”

“I can proudly state that Sveaskog is an important part of the total value chain that creates the conditions for climate-smart products and growth in the bioeconomy and thus contributes positively to climate change.”