Hitt og þetta 24. júlí 2007

Södra six-monthly report 2007 - 16 percent return on capital employed

Six-monthly report January-June 2007 +-----------------------------------------------------------+ | | Jan-Jun 2007 | Jan-Jun 2006 | |----------------------------+---------------+--------------| | Net sales, SEK M | 9,218 | 8,250 | |----------------------------+---------------+--------------| | Operating income, SEK M | 883 | 596 | |----------------------------+---------------+--------------| | Return on capital employed | 16% | 11% | +-----------------------------------------------------------+ Södra has shown strong profit development during the first half-year. Despite non-recurring costs for Hurricane Per and a write-down at Tofte (see below), operating profit after non-recurring items has increased from SEK 596 M to SEK 883 M and return on capital employed has increased from 11 to 16 per cent. "Despite Hurricane Per we can see that we've managed to keep up our productivity work in the mills, where we're on track to achieve our long-term objective of 2 per cent annual productivity improvement. During the first half-year we have implemented 532 improvement proposals. During the same period we have also invested SEK 695 M (598) in assuring our long-term competitiveness," says Södra President and CEO Leif Brodén. Record volumes have been achieved in all core businesses. For Södra Timber, the market continues to be strong with increasing prices. Production has reached record levels with 911,000 cubic metres (788,000) of goods produced and an increase in planing to 62 per cent (61). During the period, Baro Wood AB in Åtvidaberg was acquired and in conjunction with this the Mönsterås sawmill has gone down to two shifts and now specialises in whitewood. In early May a fire occurred on one of the barkers at the Långasjö sawmill and a new barker already in operation by early June. Södra Cell has had strong production during the first half-year. The price level for softwood sulphate pulp increased to almost USD 800 per tonne towards the end of the period, but this price increase is set off against a falling dollar. The average gross price for delivered softwood pulp in Europe was SEK 5,220 (4,740) per tonne during the first half-year. Total pulp production was 1,000,000 tonnes (979,000). In conjunction with a strategic overview of the Södra Cell Tofte pulp mill in Norway and an associated impairment test, a write-down of NOK 160 M, equivalent to SEK 186 M, has been made. Gapro is also experiencing a strong market for interior wood products. The strong trend is however offset by increased raw material costs. During the period the Lona moulding mill in Norway and Sund's parquet in Denmark were acquired. During the first half-year Södra Skog has focussed on managing the consequences of Hurricane Per in late January. Prior to mid-year, a total of 6.9 million m3fub storm wood has been processed of the estimated total of 7.5 m3fub that Södra has contracted. The processing has been assisted by some 130 extra trucks and 100 extra felling groups. "In total we have taken costs of SEK 91 M into this report for increased transport costs and for range variation in conjunction with Hurricane Per," says Leif Brodén. Address questions to: President and CEO Leif Brodén, +46 70 558 94 26 CFO Mikael Staffas, +46 70 511 64 97 Communications Director Per Braconier, +46 70 534 51 66