Södra posts record result – Board proposes a profit distribution of SEK 3.2 billion

In 2022, the Södra Group’s net sales rose 23 percent to SEK 33,367 million (27,060). Södra’s operating profit totalled SEK 7,805 million (5,316), the highest annual figure ever posted by the company, and a year-on-year increase of 47 percent. At year-end, return on capital employed was 35 percent (25) and the equity ratio was 65 percent (63).

Södra’s Board proposes a profit distribution of SEK 3,243 million to members, the highest-ever figure for a single year. The total corresponds to an average distribution of SEK 63,010 per member and 42 percent of profit before tax. The proposal will be resolved by the Annual General Meeting in Lund on 31 May 2023.

Södra’s President and Lotta Lyrå: Joint effort

The 2022 result is a product of the high volumes of good quality delivered by Södra’s mills, while the market was characterised by favourable price levels for Södra’s core products, and a positive exchange-rate effect. In 2022, a record amount of paper pulp was produced and Södra’s pulp mills delivered 140,000 tonnes more than in 2021. In addition, the Group’s focus on world-class efficiency has so far created efficiency gains corresponding to just over SEK 300 million on a full-year basis, which also contributed to the result.

“Södra delivered a record result for the year. 2022 was an intense year, and this result confirms the combined strength of the association’s 51,000 members and 3,300 employees. It reflects the key role of family forestry in the climate transition, combined with the fantastic efforts of our members and employees during the year,” said Södra’s President Lotta Lyrå.

“We are delighted and proud to be proposing a record distribution. We have an exceptional time behind us and over the years, many members have been contributing to the association’s strong performance. It is important that the result is shared with our members – especially at a time when many are directly impacted by high energy prices and other challenges. The Södra Model is based on rewarding active members and it is proving its strength once again,” said Lotta Lyrå.

Several initiatives during the year In 2022, Södra made several strategic investments to strengthen the association’s underlying competitiveness and is thus less affected by the turbulent business environment. These included:

  • Expanded sources of revenue. To renew the value of forest estates, Södra is investing in more sources of forest revenue. With a nature conservation premium, those members who set aside a higher percentage of their forest land than is required by forest management certification systems will be paid more for their wood. With the new company, Södra Ädla, the association will attract new business moving forward by investing in companies that strengthen family forestry and forest estates.
  • Further development of the mills. During the year, efforts to develop Södra’s mills continued. The aim is to improve the efficiency and productivity of both the sawmills and the pulp mills. Following a decision in 2020, new equipment became fully operational at Södra Cell Värö, which also contributed to higher operational reliability and increased production.
  • Investment for better deliveries. To strengthen its service to members, Södra has decided to build its own cold storage facility with a capacity for 40 million seedlings. This will enable better control over seedling supplies, with more and even better seedlings for members’ forests. The cold storage facility will be built adjacent to the Falkenberg nursery.

“The global economy is facing significant challenges. Uncertainties in the macro environment could have a negative impact on Södra in the short term, such as a weaker economy and higher prices for raw materials. 2023 is expected to be a challenging year, while the climate transition is creating long-term demand for forest raw material. We are therefore focused on what we can actually influence and will continue to increase and highlight the value that Södra’s 51,000 members are creating from family forestry,” said Södra’s President Lotta Lyrå.