The European economy remains under considerable inflationary pressure, which the central banks are attempting to bring under control, while at the same time the energy situation is challenging in both the short term and the long term. With our own forests and energy production as a foundation, we have been able to navigate this challenging world well and could yet another quarter keep profits at a historically high level, SEK 1 737 million. Cash flow was very strong and at the end of the quarter net debt had decreased to SEK 376 million. At the beginning of April, SEK 2 592 million was distributed to shareholders in the form of an ordinary and an extra dividend.

Competition on the wood market remained strong and with the loss of deliveries from Russia the prices for pulpwood increased further. The prices for logs remained at historically high levels. Higher wood prices meant that the profit for forest was SEK 351 million, which is 15 per cent higher than a year ago. Our position in the wood market, where we have good control over raw materials and the entire value chain, is a true advantage in these uncertain times. It ensures the security of our raw material supplies and provide a solid foundation for the continued development of our production facilities.

Demand for paperboard for consumer packaging was lower than normal as customers decreased stocks. Prices remained stable after last year’s price increases. Profit for paperboard was SEK 299 million and continued to benefit from high revenue from sales of excess electricity. Backed by our strong wood supply, we are carrying out a long-term investment programme at Iggesund Mill to meet demand in the customer segments with the highest quality requirements.

The market balance for paper weakened in the quarter but due to an uncertain supply of raw materials for many producers, prices remained at a stable level. We have advanced our positions in the market although we made production curtailments to a greater extent. Despite lower volumes, profit remained very strong at SEK 836 million, thanks to high selling prices and low electricity costs. To further strengthen our market-leading position in book paper and increase production of our new packaging product, we are now proceeding with an investment of SEK 450 million in rebuilding a paper machine in Braviken.

There is strong interest in large-scale building in wood, but demand from other sections of the construction market is currently weak due to increasing interest rates slowing down new construction. Selling prices stabilised at historically good levels in the quarter due to supply limitations in several major production countries. High costs for logs, however, mean that the profit from wood products for the quarter was low at SEK 23 million. We continue to see good opportunities to develop the wood products business and contribute to the necessary transition to more sustainable construction.

The energy situation in Europe has improved thanks to a mild winter, energy savings and production curtailments within energy-intensive industry, although there is still an energy shortage and prices remain high. Transmission limitations meant that electricity prices in northern Sweden, where we have most of our hydro and wind power production, were lower than in the rest of Sweden and Europe. The price of electricity in the north was still 50 per cent higher than the ten-year average, which together with increased wind power production contributed to a good profit from energy of SEK 282 million. We see good opportunities for increasing the production of wind power on our own land but, like everyone else, we are dependent on faster and more predictable permitting processes.

With our large forest holdings as a foundation, we grow houses while also harnessing the energy that blows over the treetops and flows in the rivers. We then make renewable packaging, magazines and books from the forest residues. Our strong financial position makes us well equipped to exploit the opportunities opening up in a world that is striving towards a sustainable society while at the same time raw materials and energy are in short supply.

Stockholm, 28 April 2023

Henrik Sjölund
President and CEO