SCA, a leading Swedish forest products company, has published its financial results for the first quarter of 2024, showing mixed financial performance compared to both the previous quarter and the same period last year. The Sundsvall-based company, known for its sustainable forestry and renewable products, reported a decrease in net sales to SEK 4,558 million from SEK 4,813 million in Q1 2023, attributing the decline primarily to lower selling prices despite increased delivery volumes.

The first quarter’s EBITDA fell to SEK 1,596 million from SEK 2,055 million in the corresponding period in 2023, with a reduced EBITDA margin of 35.0%. This reduction was influenced by negative exchange rate effects and lower selling prices, although these impacts were somewhat mitigated by the company’s high degree of self-sufficiency in wood raw material, energy, and logistics. Operating profit also saw a significant drop to SEK 1,077 million from SEK 1,596 million.

Despite the declines in various financial metrics year on year, SCA experienced some positive developments over the last quarter. Net sales increased compared to Q4 2023’s SEK 4,384 million, mainly due to higher selling prices during the period. The market for fiber-based products, including northern bleached softwood kraft pulp (NBSK) and chemical thermomechanical pulp (CTMP), showed strength, contributing to this rise. Additionally, demand for packaging material such as kraftliner progressively rose during the quarter, with price increases announced for the upcoming second quarter.

SCA’s strategic capital expenditures recently made in its pulp and packaging paper sectors resulted in higher delivery volumes. This increased production capacity aligns with the company’s focus on enhancing its sustainability initiatives and efficiency. Furthermore, SCA’s initiative in renewable energy was highlighted with 797 wind turbines operating on its land, producing a combined annual capacity of 9.4 TWh.

The report also indicated that the market for solid wood products improved due to severe production constraints at Swedish sawmills since the previous autumn, resulting in more robust market balances and higher selling prices for these products in comparison to the preceding quarter.

The financial performance and strategic developments of SCA come at a time when the industry is increasingly focused on sustainability and the efficient use of resources. This emphasis is demonstrated by the operational commencement of a jointly owned biorefinery in Gothenburg, which further leverages the biomass resources from SCA’s extensive forest holdings to produce renewable energy.

SCA’s management, including President and CEO Ulf Larsson, is set to discuss these results and future plans more comprehensively at a press conference scheduled for April 26, 2024. This event marks an opportunity for investors, media, and industry analysts to gain deeper insights into the company’s strategy going forward and its implications for the forest products sector.

As Europe’s largest private forest owner, SCA continues to be at the forefront of developing sustainable forest management practices, which are crucial in addressing global sustainability challenges. The adaptations and strategic initiatives undertaken by SCA highlight the company’s proactive approach in navigating market fluctuations and advancing sustainability goals within the industry.