Södra’s profit after financial income and expenses for 2009 declined by SEK 34 million to SEK 662 million compared with 2008. Revenue declined by SEK 297 million to SEK 16,696 million. Recession progressed to recovery in the second half of the year. Strong productivity development and a positive effect on profits from implemented employee suggestions dampened the negative effects of the crisis. Non-recurring items also contributed to improved profitability.
The effects of the global economic crisis resulted in a very weak start to the year. Extended market shutdowns were held in the spring at Södra’s Norwegian pulp mills. At the same time, the decline in price and demand that commenced with the crisis continued during the early part of the year. Price falls slowed in the second quarter and began to recover after the summer.
“During the year we went from a situation of economic crisis to one more resembling a normal recession. Our production units have been running at full capacity since summer apart from shutdowns in conjunction with planned maintenance,” said Södra President and CEO Leif Brodén.
“We have countered the economic fluctuations with measures in the areas we can affect. We have adapted our production rate. In addition, Södra has performed extremely well in terms of productivity development. In 2009 we implemented 3,400 improvement suggestions from Södra employees, the total effect of which represents an annual profit improvement of SEK 93 million,” he continued.
“The total average productivity improvement for the Group was 1.7 per cent, with variations between business units. Södra Timber, for example, increased its real productivity by more than 5 per cent,” said Brodén.
After the initial crisis, the second half of the year was characterised by low pulp inventories at producers as well as buyers. In particular, robust demand in China contributed to the stronger balance on the pulp market and the strengthening of Södra Cell’s profit in the second half-year. This situation with a balanced market and low pulp inventories still prevails. Pulp inventories at European producers in December were down to 16 days.
