Södra‘s profits have more than halved in the first nine months due to a long list of factors including higher timber costs and a weaker sawn timber market.
Net profits fell to SKr731m from SKr2bn a year earlier, while sales fell to SKr13.9bn from SKr14.9bn.
Södra said other reasons for the big drop were adverse currency exchange effects, lower delivery volumes and the fire at Södra Cell Monsteras.
“The market is being affected by the uncertainty caused by the effects of the debt crisis in Europe and the US,” said group president Leif Broden. “At the other end of the scale, we have globally high timber costs as a balancing factor.”
But demand in Asia, particularly China, remains strong.
He predicted the European market would remain weak over the next year but he has noticed a change for the better on the North American market.
He said a reverse in the market would largely be determined by politicians’ handling of the debt crisis.
Södra’s deliveries of sawn timber products fell by 101,000m³ over the first nine months of the year to 1.16 million m³ (2010: 1.26 million m³).
Exports have been developing well in Japan, Germany, China and the Baltic States.
“There are signs that production levels in Swedish and other European sawmills are being cut back in response to a weaker market. However, we have not seen the effect of this as yet,” said Mr Broden.
Raw material supplies to Södra’s operations have been stable, with unchanged prospects for the remained of the year.
