Setra records SEK22m operating loss in Q316 October 2019
Swedish wood product manufacturing giant Setra says challenging market conditions has led to a SEK22m operating loss in Q3.
The results compare to a SEK54m operating profit a year ago.
Setra said the poorer results were mainly attributable to lower sales prices in combination with higher wood prices and lower production volumes.
“Since the end of 2018, market conditions have become increasingly challenging,” said Anders Nordmark, acting CEO of Setra.
“A good supply of timber – spruce in particular – in both Scandinavia and Central Europe, combined with a somewhat weaker growth rate is putting pressure on prices in the wood products market across the globe. There is still a high degree of uncertainty regarding the market trend in the next quarter.
Setra reported an operating profit of SEK95m (2018: SEK287m) for the period January–September 2019. Net sales totalled SEK3.26bn (2018: SEK3.32bn)
Meanwhile, the company’s strategic investments are running according to schedule, such as the construction of its cross-laminated timber (CLT) factory in progress in Långshyttan with work set to be completed in the first half of 2020. The new trimming and planing line in Hasselfors will be fully operational in the second half of 2020.
Construction of the first plant for manufacturing pyrolysis oil will begin at Setra’s Kastet sawmill in the autumn. Production is being run by the company Pyrocell, which is jointly owned by Setra and Preem. The plant is expected to be operational in 2021.
“We want to increase the value and the climate benefits of our products, which is why we’ve chosen to focus on the production of bio-oil from sawdust, which is used in the production of biofuels,” added Mr Nordmark.