Finances in summary
A weaker pulp market with lower pulp prices and lower sales of wood raw materials caused a decline in consolidated net revenue of SEK 297 million to SEK 16,696 million (16,993). The reduced sale of wood raw materials was due to depletion of storm inventories during the year and the limited supply of fresh wood. Sales of sawn timber and interior wood products increased somewhat.
Operating profit declined to SEK 593 million (809). Södra Timber and Södra Skog improved profit over the previous year. Market-related production shutdowns in the first half-year contributed to a significant decline in profit for Södra Cell. Södra Interiör had a lower income due primarily to the weak market situation in Sweden and Denmark, and restructuring costs in the company’s hardwood sawmill operations.
Return on capital employed was 6 per cent (8). Average yield over the past five-year period has been 11 per cent.
The equity ratio strengthened to 58 per cent (57). Balance sheet total was SEK 16,876 million (16,411). The increase was primarily due to the high level of investment activity and a number of acquisitions. Inventories declined to SEK 2,239 million (3,531). This was due to the closure during the year of terminal inventories of saw logs and pulpwood from earlier storms, and the strong recovery in the pulp market in the second half-year that contributed to pulp inventories declining to a historically low level.
Equity increased to SEK 9,806 million (9,346), of which paid-up and issued contribution capital represented SEK 2,211 million (2,113). At the end of the year Södra’s external borrowing consisted primarily of loans from members.
Cash flow was SEK 339 million (–329). Tied-up operating capital decreased by SEK 1,510 million (301). Investments totalled SEK 1,387 million (1,412) and primarily pertained to pulp mills and the acquisitions made by Södra Timber and Södra Interiör. In addition, Södra Skog purchased forest estates in the Baltic States. Dividends paid during the year amounted to SEK 258 million. Loans were repaid to members totalling SEK 160 million.
The Board’s proposal for profit allocation involved a member transfer of SEK 386 million. The dividend on subordinated debentures is per contract.