Sveaskog’s Interim Report, January-September 2021: The market for sawlogs is strong

Sveaskog’s operating profit during the first nine months of the year amounted to MSEK 1,033 (812); the increased profit is primarily due to a new method for valuing forest assets. The new method means that costs for reforestation, MSEK 202, from this year are recognised under change in value of forest assets. Despite the new method, the profit is somewhat higher than in the previous year.

1 July – 30 September 2021

  • Net sales increased by 13 per cent to MSEK 1,472 (1,307). Total delivery volumes increased by five per cent and the prices of wood raw materials increased by eight per cent on average.
  • Operating profit increased by 79 per cent to MSEK 243 (136). The increased profit is primarily due to a new method for valuing forest assets. The new method means that costs for reforestation, MSEK 75, from this year are recognised under change in value of forest assets. Despite the new method, the underlying profit is somewhat higher than in the previous year, despite increased nature conservation costs. (See more on pages 10 and 11).
  • The reported net change in value of standing timber amounted to MSEK 113 (157).
  • Profit for the quarter amounted to MSEK 499 (208), equivalent to SEK 4.21 (1.76) per share.

1 January – 30 September 2021

  • Net sales increased by two per cent to MSEK 5,032 (4,916). Total delivery volumes were almost unchanged and prices of forest raw materials increased by an average of two per cent.
  • Operating profit increased by 27 per cent to MSEK 1,033 (812). The increased profit is primarily due to a new method for valuing forest assets. The new method means that costs for reforestation, MSEK 202, from this year are recognised under change in value of forest assets. Despite the new method, the profit is somewhat risen than in the previous year, despite increased nature conservation costs.
  • The reported net change in value of standing timber amounted to MSEK 414 (464).
  • Profit for the period amounted to MSEK 1,586 (1,035), “The market for sawlogs equivalent to SEK 13.40 (8.74) per share.

Comments from Sveaskog’s President and CEO Per Matses,:

– The market situation remains good for our customers in the Swedish forest industry. Sawmills are heading for a record year due to high prices for sawn timber, although there has been a trend break in the last quarter with price drops in some markets, albeit from high levels. The production level is high and there has been some build-up of the sawmills’ stock levels. Pulpwood prices are fairly stable. In the raw material market, there is plenty of timber and there are strong flows of timber while felling activity is high.

– Work on the sustainable forestry programme continued during the quarter, and we are carrying out and planning for activities intended to increase biodiversity and strengthen resilience to climate impact in forests and on forest land. During the quarter, we carried out selective felling during regeneration felling in selected ecoparks,and restoration measures were started in wetlands and watercourses.

– During the quarter, questions were raised about our consultations with the reindeer industry. In the event of felling and other forest management activities in Sámi territory, adjustments are made for the reindeer industry. In Sweden, there are regulations, clear requirements and procedures to ensure this. Sveaskog follows these for all fellings. In our sustainable forestry programme, we also highlight how we can develop collaboration with the reindeer industry. This includes increased cleaning and thinning in reindeer grazing areas.

– In September, SVT Science broadcast a series called Slaget om Skogen (The Battle of the Forest) that drew attention to our sustainable forestry programme. Subsequently, we were asked many questions about the alleged felling of young forest. SVT’s statements in the programme are incorrect, and we have responded to these misstatements to the series editors and on our website and social media.

For more information, please contact:

Per Matses, President and CEO, +46 8 655 92 90 Kristina Ferenius, CFO, +46 10 471 81 11 Sveaskog's Press Service, +46 8 655 90 50, press@sveaskog.se

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