Sveaskog's Interim Report January-September 2023: Timber prices continue to rise

1 January – 30 September 2023

• Net sales increased by 3 per cent to MSEK 5,873 (5,716). Timber prices increased by an average of 15 per cent, while delivery volumes decreased by 12 per cent, mainly as a result of a lower planned production rate.
• Operating profit increased by11 per cent and amounted to MSEK 1,230 (1,112). 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 21 (602), mainly due to worse market conditions for Setra Group.
• The reported net change in value of biological assets amounted to MSEK –60 (320).
• Profit for the period amounted to MSEK 812 (1,691), equivalent to SEK 6.86 (14.28) per share.

Significant events

• The storm Hans struck Sveaskog hard and about 500,000 m3fub were felled.
• Sveaskog is investing in an AI company and becoming a part-owner of Nordic Forestry Automation (NFA).

Comments from Sveaskog's President and CEO Erik Brandsma:

- Sveaskog continued to have good demandfor forest raw materials, despite a surrounding situation characterised by inflation and a weaker economy. Swedish sawmills have benefited from the weak SEK exchange rate and, unlike their European colleagues, have not reduced their production rate. Access to timber was generally low, which meant that price levels continued to rise. 

- The current world situation and higher interest rates mean that we see a clear slowdown in new construction in the European market, which has a negative impact on the demand for timber. The market conditions in the pulp and paper industry have also weakened during the year. However, continued supply shortages meant that pulpwood prices increased during the period. We continue to experience a strong interest in biofuel deliveries, with good price development as a result.

- The continued high price level of our products has had a positive impact on our earnings. The lease revenues from wind power, which were significantly higher than last year, also contributed to the positive earnings. The average price of timber deliveries from our own forest was 20 per cent higher than the corresponding period last year, timber prices were 10 per cent higher and pulpwood prices were 46 per cent higher.