Swedish forest products group SCA’s third-quarter EBITDA fell 1% to SEK 1.63 billion as lower selling prices and negative exchange-rate effects offset higher delivery volumes and lower planned maintenance-stop costs. The company said the quarter’s EBITDA margin was 31.1%, compared with 32.9% a year earlier and 25.3% in the second quarter.
Net sales rose 5% from a year earlier to SEK 5.25 billion. Operating profit was SEK 1.05 billion, and net profit was SEK 772 million. EBITDA rose 25% from the second quarter to SEK 1.63 billion, while net sales increased 2% sequentially. The sequential EBITDA improvement came from stronger Containerboard market conditions, lower raw-material costs in the industrial segments and seasonally lower costs.
Demand for solid wood products in Europe was normal for the season, with spruce products in greater demand than pine products. SCA’s delivery volume was lower than in both comparison periods. Solid wood production in Sweden declined year on year during the first eight months of the year, while production in Finland was in line with the preceding year. Producer stocks remained high for pine and normal for spruce in Sweden and Finland, while customer stocks were estimated to remain low.
The pulp market remained weak. Average pulp selling prices decreased slightly from the second quarter, and European NBSK pulp prices also fell slightly during the quarter. Prices in China fell at the beginning of the period before increasing later. SCA’s pulp deliveries were higher than a year earlier and than in the second quarter, while global producer stocks were unchanged.
Further kraftliner price increases were implemented during the quarter, lifting SCA’s average selling prices from the second quarter. European packaging-paper demand benefited from stronger industrial production and demand from e-commerce and consumables. Delivery volume was higher year on year but lower sequentially, and European producer stocks increased seasonally.
High fuel prices weighed on the Forest and industrial segments but contributed to earnings in Renewable Energy. Demand for solid biofuels was strong for the season, driven by high European energy prices. Electricity prices in northern Sweden were stable from the second quarter and slightly higher year on year. About 20% (approximately 11 TWh) of Sweden’s installed wind-power capacity was on SCA’s land at the end of the quarter.
For January through September, net sales fell 3% to SEK 15.1 billion and EBITDA declined 24% to SEK 4.04 billion. EBITDA margin was 26.7%, compared with 34.3% a year earlier. Operating profit was SEK 2.31 billion, and operating cash flow was SEK 1.44 billion, compared with SEK 2.55 billion in the year-earlier period. Lower selling prices, negative exchange-rate effects and higher raw-material costs reduced EBITDA, while self-sufficiency in wood, fuel, energy and logistics reduced the effect of higher costs.