Swedish forest owner Sveaskog reports drop in operating profit from continuing operations to 261M Swedish kronor in Q4 from 336M a year earlier; CEO cites falling log, sawn timber prices, stronger currency

Wendy Lisney

KALIX, Sweden , January 29, 2013 (press release) – Sveaskog’s net sales for 2012 totalled SEK 6,307 million (6,724) and operating profit from continuing operations was SEK 848 million (1,085). Delivery volumes were at the same level as in the previous year.

“2012 was a tough year for the Swedish forest industry, our customers. The year was characterised by a further weakening of the economy. The price of sawn products fell at the same time as the Swedish krona strengthened. Price levels for wood raw material also fell,” comments Sveaskog’s President and CEO, Per-Olof Wedin.

“Despite the weak macroeconomic development in 2012, Sveaskog managed the year relatively well with an operating profit from continuing operations of SEK 848 million (1,085). Sales of wood raw material were on a par with the previous year and totalled 10.7 million cubic metres (m3sub). Deliveries from own forest increased by 5 %. Sales of sawlogs increased by 6% while sales of pulpwood and chips decreased by 2%. The market situation in 2013 is hard to assess,” says Wedin.

Full year

• Net sales amounted to SEK 6,307 million (6,724). Average prices decreased by 10% while delivery volumes rose 1%.
• Operating profit from continuing operations amounted to SEK 848 million (1,085). The decrease is due to lower average prices, processing costs after the storm Dagmar and the fact that earning in the previous year included insurance compensation related to the storm Gudrun. Earnings were positively affected by a higher volume of timber from the company’s own forests and a larger proportion of sawlogs in deliveries.
• Change in value of forest assets was SEK 503 million (177).
• Profit for the year amounted to SEK 2,155 million (899). The improvement is mainly due to changes in corporate tax rates with a positive earnings impact of SEK 1,328 million.

Fourth quarter

• Net sales amounted to SEK 1,585 million (1,775). Average prices decreased by 13% while delivery volumes were largely unchanged.
• Operating profit from continuing operations decreased to SEK 261 million (336) mainly due to lower timber prices.
• Change in value of forest assets amounted to SEK 141 million (–155).
• Profit for the quarter amounted to SEK 1,554 million (148). The change is due to a changed corporate tax rate.

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