Sveaskog's Interim Report January-June 2023: Strong earnings and high timber prices
Operating profit increased by 20 per cent and amounted to MSEK 1,011 (843). However, higher timber prices are offset by lower volumes from Sveaskog’s own forests and increased costs for felling, road maintenance and forest and nature conservation, among other things.
1 April – 30 June 2023
- Net sales increased by 4 per cent to MSEK 2,075 (1,991). Timber prices increased by an average of 15 per cent, while delivery volumes decreased by 11 per cent.
- Operating profit increased by 24 per cent and amounted to MSEK 449 (362). Higher timber prices have been offset by lower volumes from Sveaskog’s own forest, as well as increased costs for felling.
- Share of profits of associates amounted to MSEK 14 (251), mainly due to worse market conditions for Setra Group.
- The reported net change in value of biological assets amounted to MSEK –279 (124).
- Profit for the quarter amounted to MSEK 121 (632), equivalent to SEK 1.03 (5.34) per share.
1 January – 30 June 2023
- Net sales increased by 6 per cent to MSEK 4,226 (3,983). Timber prices increased by an average of 17 per cent, while delivery volumes decreased by 12 per cent. Other sales increases are mainly attributable to concessions for wind power.
- Operating profit increased by 20 per cent and amounted to MSEK 1,011 (843). Higher timber prices and revenues from wind power concessions were offset by lower volumes from own forest and higher felling and forest management costs.
- Share of profits of associates amounted to MSEK 8 (484), mainly due to worse market conditions for Setra Group.
- The reported net change in value of biological assets amounted to MSEK 26 (213).
- Profit for the period amounted to MSEK 768 (1,301), equivalent to SEK 6.49 (10.99) per share.
- Extensive interest in Sveaskog’s issue of green bonds.
- Steps taken to reduce the risk of fires associated with droughts.
Comments from Sveaskog's President and CEO Erik Brandsma:
- A continuation of high prices has had a positive impact on our earnings for the first half of the year. The average price of timber deliveries from our own forest was 21 per cent higher than the corresponding period last year, timber prices were 10 per cent higher and pulpwood prices were 52 per cent higher.
- At the end of March, we renewed our green framework for sustainable investments and third parties have assessed that it is in line with the EU’s new taxonomy. Sveaskog was thereby the first forest company in Europe with a green financial bond framework compatible with the EU taxonomy. This has been positively received by the market and at the introduction and start of borrowing, interest from investors reached record heights – among the largest ever for a corporate issuer in the Swedish bond market. By offering green bonds, which is in line with our sustainability work, Sveaskog meets both new investors and can increase our available capital for future-oriented investments.
- Interest in the forest continues to be high and the debate about the Swedish forest continued. As the country’s largest forest owner and state-owned forest company, Sveaskog is an important player. I am proud that we take a great responsibility for developing sustainable forestry and I see it as my most important task to future-proof Sveaskog and our business in a troubled and changing world. Sveaskog is continuing to work to increase transparency in forestry and to promote a constructive dialogue with the general public, customers, contractors, nature conservation organisations and decision-makers – not least due to the reduced felling volumes in Norrbotten. One of our priorities is to develop joint planning as well as forestry that takes reindeer husbandry into consideration, but unfortunately, at the moment, we have not reached as far in the dialogues with reindeer industry representatives as we had hoped.
- The dry climate means an increased fire risk. We have learned from the “summer of fire” of 2018 and reviewed our fire preparedness before the summer season. As part of the preventive work, we have established a fire group at national level that analyses the fire risk forecasts and can quickly decide on any measures. We have also invested in a drone with thermal cameras that can “see” through the smoke, giving us a better picture of an ongoing fire than the naked eye. In connection with the drought in June, our preparedness intensified.
For more information, please contact:
Erik Brandsma, President and CEO Sveaskog, +46 (0)10 471 81 50
Anders Jakobsson, Acting CFO Sveaskog, +46 (0)8 655 91 94
Sveaskog's press service, +46 (0)8 655 90 50, firstname.lastname@example.org