The loss of SKr203m compares with SKr577m profits for the corresponding period last year. The result after net financial items was a loss of SKr215m, compared with SKr573m profits in 2011.

Södra’s results were impacted by weak demand and continuing economic uncertainty. However, acting CEO and president of Södra Cell, Gunilla Saltin, expected markets to improve in the second half.

"We have also implemented a series of measures to strengthen our earnings potential," he said, adding that the company’s sawmills and pulp mills were expected to run at capacity.

While Mr Saltin warned that the full-year financial result would be "significantly lower" than in the past few years, he said Södra remained in a strong position.

"With an equity ratio of around 60% we are primed to handle longer and deeper crises than the one we are currently experiencing," he said.