Reduced production and market stoppages hve led to Södra posting a first-quarter operating loss of SKr41m, and the company has hinted that 2012 could be another “lost year”.

The first-quarter loss compares to profits of SKr378m a year ago.

Södra group chief executive Leif Bróden said the company’s sawmills recorded a “low” production rate of 70% of normal capacity. Pulp division mills recorded a 73% rate.

“Together with the first quarter of 2009, this is historically the lowest level of capacity utilisation the company has seen,” he said.

“January and February experienced the lowest production figures, but they also mark the turning point. All production units have been back to normal production since March 20.”

He said higher sawn timber prices were expected over the course of 2012, but only small volume growth.

“Viewed from a new development perspective, it seems that 2012 will be another lost year. The sawmill structure will probably need further streamlining.”

He predicts normal capacity utilisation for the rest of 2012 and a full-year profit just below the 2011 result.

Södra produced 371,000m³ of sawn timber products during the quarter, compared with 391,000m³ a year ago. Production at the new Varo sawmill was reported to have developed positively towards stable, high production levels.