Södra's operating profit for the first nine months of the year amounted to SEK 879 million (SEK 1,994 million for the same period last year), which is equivalent to a return of 11 (27) per cent on capital employed. The difference of SEK 1,115 million in operating profit compared with the same period last year is explained by higher timber costs, adverse exchange rate effects, lower delivery volumes and the fire at Södra Cell Mönsterås, combined with a weak market for sawn timber products.
"The market is being affected by the uncertainty caused by the effects of the debt crisis in Europe and the USA. At the other end of the scale, we have globally high timber costs as a balancing factor. In addition, demand in Asia, and in particular in China, remains strong," said Leif Brodén, Södra's Group President.
"How quickly the uncertainty will reverse and the markets bottom out and head back up again, will be determined mainly by how the politicians continue to handle the debt crisis," added Brodén.
The pulp market was characterised by prices that remained buoyant, compared with historical levels. Lower prices in dollars over the period was compensated for by a stronger dollar against the krona. The accumulated average price over the first three quarters of the year amounted to USD 983 per tonne for bleached softwood sulphate pulp and USD 853 dollar per tonne for hardwood pulp.
Producers' stocks of pulp increased over the quarter, with levels of short fibre pulp seeing the biggest increase. European customers' stocks of purchased pulp remained at historically low levels.
