Bergs’ interim results reflect deteriorating economic situation

Net sales decreased by 16% in Q3 to SEK708m (2021 Q3: SEK846m) due to lower sales volumes and sales prices, particularly in its wood protection division.

Q3 EBITDA amounted to SEK46m (2021 Q3: SEK186m). The lower sales prices and higher raw material costs for sawn wood were also a factor here. Higher sales prices and sales volumes for the pellet business contributed positively. 

The development of Berg’s Joinery products continues to be favourable where both sales volumes and prices have increased during the quarter. 

“The effects of the uncertain situation with an ongoing war, high inflation and rising interest rates reduce demand for several of the Group’s products,” said Bergs. 

“The decline in demand for wood products in the do-it-yourself sector has continued during the quarter. At the same time, the pace of new construction, renovation and infrastructure projects remains good in several of our important markets. Demand for windows and doors remains good.”

Bergs said that as a result of increased stocks and lower profitability, a number of planing and sawmill companies had announced production curtailments for the rest of the current year.

“Rising energy costs have increased the demand for energy wood and pellets with sharply rising prices as a result. The increased demand for energy- and pulpwood is now slowing the harvesting of saw logs in several places, which will further reduce sawmill production.”

Bergs said it would reduce production in Q4 at its Estonian sawmill, while planning to maintain normal production volumes at its Latvian sawmill.

“Our assessment is that the market for solid-wood products will be in balance in the coming spring.”