Södra’s profit in 2009 declined by SEK 34 million ($4.7 million) to SEK 662 million ($91.5 million)

   Moscow. Feb 03, 2010. /Lesprom Network/. Södra’s profit after financial income and expenses for 2009 declined by SEK 34 million ($4.7 million) to SEK 662 million ($91.5 million) compared with 2008. Revenue declined by SEK 297 million ($41 million) to SEK 16,696 million ($2.3 million), company said in a press release received by Lesprom Network.

The effects of the global economic crisis resulted in a very weak start to the year. Extended market shutdowns were held in the spring at Södra’s Norwegian pulp mills. At the same time, the decline in price and demand that commenced with the crisis continued during the early part of the year. Price falls slowed in the 2Q and began to recover after the summer.

“During the year we went from a situation of economic crisis to one more resembling a normal recession. Our production units have been running at full capacity since summer apart from shutdowns in conjunction with planned maintenance,” said Södra President and CEO Leif Brodén.

“The total average productivity improvement for the Group was 1.7%, with variations between business units. Södra Timber, for example, increased its real productivity by more than 5%.

After the initial crisis, the second half of the year was characterised by low pulp inventories at producers as well as buyers. In particular, robust demand in China contributed to the stronger balance on the pulp market and the strengthening of Södra Cell’s profit in the second half-year.

This situation with a balanced market and low pulp inventories still prevails. Pulp inventories at European producers in December were down to 16 days.

A weak timber market in early 2009 led to major production cutbacks primarily in Central Europe and Finland. Despite the recession and decline in construction these measures contributed to the market becoming balanced from the second quarter, which lead to gradual price increases. Following an amount of retooling in the first quarter, Södra Timber has essentially been able to operate at full capacity,” said Brodén.