10 SÖDRA A strong year for Södra How has Södra managed to turn round its finances so dramatically in the past year?
tuned the corner and returned to growth? For example, Södra’s fortunes
A
have been dramatically improved. While sales were up five percent to SEK 17.34 billion (US$2.08bn), largely as a result of higher prices for finished goods and increased volumes, it turned round a SEK 417 million ($50m) loss in 2013 into a profit of SEK 1.52 billion ($181m) last year. The dramatic improvement was
attributed to being charged in 2013 with restructuring costs for the closure of Södra Cell Tofte AS. Since then Statkraft and Södra
have signed a cooperation agreement regarding collaboration on the future production of
fter a few years of lacklustre financial performance, have paper makers at last
forest-based biofuel at the Tofte mill. The intention is that Södra and Statkraft will establish a new biofuel company, in which Södra owns 49 percent and Statkraft 51 percent of the shares. During the period, Södra signed a share purchase agreement with Statkraft Energy AS pertaining to the sale of all shares in Södra Cell Tofte AS. However, before entering into force, the agreement is subject to a number of conditions that, on the balance-sheet date, had not been met. With headquarters at
Skogsudden in Sweden, Sodra is an economic association of more than 50,000 forest owners in southern Sweden. They own just over half of all privately owned forest in the area, as well as a group of companies that are successful in both Swedish
Pulp Paper & Logistics
and international markets. This gives them a market for their raw materials from the forest and at the same time provides the foundation for profitable forestry. Chief executive Lars Idermark
explains the background in his year-end report: “After several years of weak
economic growth, 2014 as a whole
About SEK 5bn has been invested by Södra at its Värö (pictured) and Mörrum mills during the past year
was a good year for the Swedish forest industry. Improved market conditions, higher prices for paper, pulp, and sawn timber, and a more favourable currency situation contributed to the positive trend. Although the Swedish forest industry is basically efficient, innovative and well-invested, a transformation is taking place due to digitisation and new consumption patterns. “In an increasingly global market, only production facilities and companies with strong cash flows, efficient product development and a willingness to adapt are surviving. “In 2014, the Södra Group’s financial performance was better than expected. It feels satisfying to report operating profit that improved SEK 1.9 billion ($227m) year-on-year and from a loss of SEK 417 million in 2013 to profit of SEK 1,516 million in 2014. “These are very good results, and Södra has favourable liquidity and a balance sheet that remains strong. We exceeded our financial objectives. Return on capital employed amounted to 13 percent, the equity ratio was
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