Södra delivers a strong 2024 result amid challenging times
Sweden's largest forest owners association Södra has presented a strong result for 2024. Operating profit totalled SEK 2,630 million and Södra’s Board proposes a profit distribution of SEK 1,753 million to members. During the year, the implementation of Södra’s strategy continued, with a focus on strengthening competitiveness in both the long and short term to create maximum value for forest estates.
In 2024, net sales for the Södra Group amounted to SEK 29,487 million (28,896). Operating profit totaled SEK 2,630 million (2,226). At year-end, the return on capital employed was 10 percent (9) and the equity ratio was 62 percent (64).
During the year, the Group’s focus on continuous improvement resulted in progress and efficiencies with an annual recurring effect of SEK 613 million.
Södra delivered a strong result for 2024, especially in light of the raw material market we are operating in. We have been positively impacted by high pulp prices and continued good cost control in particular, but challenged by high raw material prices and the prevailing global uncertainty, which also affected market demand and logistics, said Lotta Lyrå, President and CEO of Södra.
To be decided at the Annual General Meeting in June, Södra’s Board proposal is that approximately two-thirds of the profit for 2024 be distributed to members, amounting to a profit distribution of SEK 1,753 million.
The total corresponds to an average distribution of SEK 33,642 per member and 64 percent of profit before tax.
Initiatives for strengthened competitiveness
Södra’s mission is to refine and renew family forestry by ensuring that its sawmills and pulp mills process the raw material most profitably.
In 2024, the raw material situation in Sweden was marked by a clear shortage of raw materials, which affected both forest estates and Södra’s industrial operations.
Raw material from the forest has become exclusive. While this benefits forest estates, it also brings challenges for the sawmills and pulp mills that produce sawn timber, pulp, bioenergy, and biochemicals.
The raw material situation has led to significantly more fluctuations, and Södra has therefore taken initiatives that are driving transparency in the wood market and creating security for forest owners.
One such example is new pricing terms, which mean that forest owners receive the higher wood price should the price be raised within 60 days of signing the agreement.
To strengthen its long-term competitiveness, Södra made important decisions in 2024 to invest in the production of both kraft lignin at its Mönsterås pulp mill and tannin at its Värö pulp mill.
These two new products are anticipated to create profitability while contributing to the green transition and a higher degree of wood processing.
As a cooperative and an industrial group, we stand stable but never still. As we look back on 2024, it was a year in which we maintained a high pace of change to take advantage of the forest’s many opportunities, while also handling external factors that affect our business both long and short term. Thanks to wise decisions and hard work by all employees, we delivered a good result and can continue to invest in line with our strategy, Lotta Lyrå said.
In addition to investments in Södra’s future product portfolio, an industrial consolidation in Södra Wood was also carried out during the year.
The aim was to create the sawmill structure that generates the greatest possible value for Södra and forest estates, and the change has already had a positive impact on earnings this year Södra says.
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