Södra Wood recorded a Q3 operating loss of SEK256m (Q3 2025: SEK103m loss) with the market for sawn timber performing poorly again.
The division saw Q3 demand remain low in several of Södra’s major markets, including the UK and the US. The earnings trend was mainly due to lower delivery volumes, lower market prices and higher raw material costs.
Markets such as the Netherlands, Poland and Sweden demonstrated a more stable trend. The market for cross-laminated timber (CLT) was also challenging due to weak construction activity. The export business grew, resulting in a year-on-year increase in delivery volumes.
Södra Building Systems’ operating loss for the quarter totalled SEK37m (Q3 2025: SEK51m loss). The improvement was mainly driven by growth and increased delivery volumes but was partly offset by higher raw material costs. Activity in the export business increased during the quarter.
However, Södra said group-wide it posted an operating profit for the period and that while markets remains challenging, “earnings are steadily moving in the right direction”.
In Q3, net sales for the Södra Group amounted to SEK6.49bn (Q3 2025: SEK6.34bn), up 2% year-on-year. Operating profit totalled SEK267m (Q3 2025: SEK360m loss) representing an operating margin of 4%.
The year-on-year earnings improvement was mainly due to higher delivery volumes for paper pulp, higher prices for energy products and lower overheads. Operating profit was also positively impacted by the capital gain of SEK288m resulting from the divestment of shares in Sunpine.
Excluding this effect, Södra reported an operating loss of SEK21m, which reflects the continued challenging market environment with depressed demand and an imbalance between raw material costs and product prices.
“Earnings are moving in the right direction, and we can see that our intensive efforts in areas that we ourselves can control are yielding results,” said Lotta Lyrå, President and CEO.
“The performance of the pulp business is improving; the contribution margin is stronger and our overheads decreased by SEK200m compared with the same period last year. This means that we are standing on firmer ground today than we were one year ago.
“Meanwhile, profitability is still not where it needs to be, not least because of the very challenging situation facing the sawn timber business. We are therefore continuing our transition with undiminished vigour and focusing fully on strengthening our competitiveness.”
