Thanks to our strong cash flow, we were able to pay out an extra dividend and buy back 1.5 per cent of outstanding shares while maintaining a low indebtedness. 

Despite the economic slowdown there are not enough supply of forest raw materials. Competition on the wood market remained strong in the Nordics during the quarter and prices increased further. Wood prices are now 30 per cent above their historical level, which increased profit from forests to SEK 390 million. Our position on the wood market, with good control over raw materials and the entire value chain, ensures the long-term security of our raw material supplies and gives us good opportunities to continue developing our industries.

Demand for paperboard for consumer packaging was lower than normal as customers continued to destock and the economy weakened. Prices were stable after the increases introduced last year. The profit for the quarter was burdened by SEK 140 million following a major maintenance shutdown in Workington. Together with lower revenue from sales of excess electricity and weaker market conditions, this means that profit decreased to SEK -49 million. The investment programme to increase capacity at Iggesund Mill has begun and will enable a gradual increase in sales to the customer segments with the highest quality requirements. 

The market balance for paper was weak, which drove down prices, although they remained at historically high levels. We are continuing to advance our market positions, but we have also been forced to make significant production curtailments. Despite lower selling prices, second quarter earnings were very high, at SEK 659 million. We are continually developing our book and magazine paper while also investing to enable an increased production of our new packaging products in a little over a year from now.

There is strong interest in large-scale building in wood, but demand from other segments of the construction market is currently low due to high interest rates  and inflation. After a considerable price drop in the second half of 2022 the price stabilised at a historically good level because of a shortage of raw materials in several high production countries. However, the high cost of logs limited the profit from wood products to SEK 55 million. With a strong position in the wood market, we continue to see good opportunities to develop the wood products business in pace with an increasing demand for sustainable building materials. 

The energy situation in Europe has improved, but there is a continued shortage of energy over both the short and the long term. Electricity prices in northern Sweden decreased during the quarter. Together with weaker winds and lower precipitation than normal this means that profit from renewable energy decreased to SEK 135 million, which is a good level from a historical perspective, however. In June we were granted environmental permits for 14 wind turbines in Blisterliden outside Skellefteå and we are now preparing for an investment decision in 2024.

With our large forest holdings as a foundation, we grow houses while also harnessing the energy that blows over the treetops and flows in the rivers. We then make renewable packaging, magazines and books from the forest residues. Our strong financial position makes us well equipped to exploit the opportunities opening up in a world that is striving towards a sustainable society where raw materials and energy are in short supply.

Stockholm, 17 August 2023

Henrik Sjölund
President and CEO