Improved volumes and market prices helped to ensure a strong result for Södra during the first half of 2010.

The company’s operating profit reached SKr1bn (2009: SKr9m) for the period, with sales up to SKr9bn (2009: SKr8bn).

Södra said the timber market was in good balance and further price increases were expected over the third quarter, though it cited uncertainty for the fourth quarter because of European government austerity packages.

“New construction activities in Europe and the US remain at historically low levels,” it said. “At the same time, the renovation rate is relatively high on a number of important timber markets. Production in Europe and Canada is being held back due to limited access to raw materials.”

This it said, meant the timber market was in good balance.

It said the log market was characterised by huge competition and that it had now contracted timber for the rest of the year.

“The total cost for the raw timber is estimated to increase over the second half of the year by SKr330m,” it said.