- Net sales for Q2 2024 were SEK 7,527 million, up 3% year-on-year.
- Operating profit was SEK 398 million with a 5% operating margin.
- A SEK 2 billion investment in kraft lignin production at Mönsterås is set to be operational by 2027.
- Tannin production at Värö is scheduled to start in 2026.
Q2 Financial Performance
Södra reported net sales of SEK 7,527 million for the second quarter of 2024, marking a 3% increase from the previous year. Operating profit stood at SEK 398 million, resulting in an operating margin of 5%. The return on capital employed was 8%, and the equity ratio was 60%.
Impact of Maintenance Shutdowns
The stable result was influenced by high pulp prices and effective cost control, despite higher raw material costs and SEK 275 million in expenses for scheduled maintenance shutdowns at Värö and Mörrum. The sawn timber market remained weak due to the economy, but prices held steady due to lower supply. The paper pulp business also faced challenges from maintenance shutdowns, though demand remained positive relative to supply.
Investment in Kraft Lignin Production
Södra is investing over SEK 2 billion in a kraft lignin production facility in Mönsterås, expected to be operational by 2027. This investment will make Södra the largest kraft lignin producer globally. The project is financed through own funds, cash flow from operations, and support from the Swedish Energy Agency. Agreements have already been signed with customers for a significant portion of the future production volume.
Investment in Tannin Production
Södra is also investing in tannin production with a new production line at Värö, scheduled to become operational in 2026. These investments align with Södra's strategy to enhance the value of its wood raw material and contribute to sustainability and profitability.
