Södra’s 1Q net sales down 12%
Södra,Q1 2020,profits,sawn timber,Sweden
Despite dramatically changed conditions in the wake of the COVID-19 pandemic, production rates at Södra’s facilities remained high and stable in the 1Q 2020. During the 1Q 2020, consolidated net sales amounted to SEK 5,576 million (US$574 million), down 12% year-on-year. Operating profit totalled SEK 227 million (US$23.4 million) and the decline in profitability was due to lower price levels for paper pulp and sawn timber. The result corresponds to an operating margin of 4%. Return on capital employed was 4%.
“In the wake of the ongoing global spread of COVID-19, conditions changed dramatically towards the end of the 1Q. Södra has taken a number of steps to protect our employees, customers and suppliers in the first instance, but also any others that we come into contact with in order to save lives and protect health. It is with great gratitude that I see how we are working together to slow the spread of the virus and to mitigate the negative effects of the ongoing crisis,” said Peter Karlsson, Interim President and CEO.
“The economic slowdown from 2019 was replaced by a general decline in supply and demand due to the outbreak of COVID-19, and the consequences are difficult to predict at present. Nonetheless, the 1Q result was in line with expectations,” said Karlsson. “Demand for Södra’s core products was favourable, although prices for paper pulp and sawn timber remained low during the quarter, albeit slightly higher at the end of the quarter compared with the beginning of the year.”