Bergs predicts continued sawn wood market volatility

Bergs recorded group net sales of SEK910m in Q1 2022  (Q1 2021: SEK593m) and SEK3.05bn net sales for the full year 2021. EBITDA in Q1 were SEK82m (Q1 2021: SEK65m) and SEK503m for the full year 2021.

Higher sales prices in sawn wood compensated higher raw material costs in wood protection, while higher volumes in joinery and higher margins in the pellet business contributed positively.

The wood protection division recorded a Q1 loss (EBITDA SEK-12m) due mainly to higher raw material costs. 

The joinery division saw a more than doubling of sales over a year ago and EBITDA tripled to SEK21m. The increased sales were mainly attributable to higher sales volume of windows and doors following the acquisition of the UK-based Performance Timber Products Group in June 2021.

The sawn wood division consists of two subsidiaries - Vika Wood in Latvia and Laesti in Estonia. Q1 divisional net sales were SEK346m (Q1 2021: SEK227m), while EBITDA doubled to SEK73m. Total production volume in Q1 was 93,000m3, with 346,000m3 produced in 2021.

Peter Nilsson, Bergs’ president and CEO, said the Ukraine war and sanctions on Russian timber had created an imbalance in the global wood products market, with some shortages and price increases bring reported in the market. 

“The price of wood chips and shavings is also affected, with price increases being implemented before the summer,” he added.

“The war has also caused disruptions in transport by both ships and trucks. This has resulted in rising logistics costs. It is currently difficult to fully see the effects of the war and we expect a continued rather volatile market for sawn wood products.”

But Mr Nilsson said the positive trend for wood products continues, with great interest among politicians, architects and builders to gradually increase the proportion of renewable raw materials where wood is doing well.