International Forest Industries
Western U.S. sawmills produced 7.406 billion board ft. (bbf) of softwood lumber in the first half of 2018, a 7.1% increase from 6.915 bbf in the first six months of 2017, the Western Wood Products Assn. (WWPA) of Portland, Oregon, reported.
Of the six-month total, Coastal mills accounted for 4.678 bbf, up 8.1% from 4.326 bbf last year, while inland mills produced 2.517 bbf, up 6.8% from 2.356 bbf in the first half of 2017. California redwood production dropped to 212 million board ft. (mmbf), down 9.4% from 234 mmbf in the previous year.
In June alone, Western U.S. sawmills produced 1.226 bbf, a decline of 1.0% from 1.239 bbf in the year before, and down 4.3% from 1.281 bbf in May 2018.
Coastal mills contributed 766 mmbf to June’s output, a year-over-year gain of 0.7% from 770 mmbf, but down 3.6% from 805 mmbf in May 2018. Inland mills accounted for 408 mmbf – down 3.3% from 422 mmbf a year earlier, and down 5.8% from 433 mmbf in the previous month.
California redwood production in June was 43 mmbf, an 8.9% year-over-year drop from 47 mmbf, and 1.1% lower that output in May 2018 of 43 mmbf.
Western softwood lumber inventories in June grew 5.4% to 1.231 bbf from last year’s 1.167 bbf.
Production as a percent of practical capacity was 83% in June, level with 83% in May 2018 and up from 80% in June last year. Average production as a percent of practical capacity for the six months to June was 83%, up from 77% in the first half of 2017.
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In June 2018, an all-time high volume of 5.1 million m3 of roundwood was harvested for use by the forest industries in Finland. This logging volume was 29% up over the previous year and 52% up over the ten-year June average, reports Natural Resource Institute Finland (Luke).
Sawlogs accounted for 2.1 million m3 and pulpwood for 3.0 million m3 out of the total roundwood harvested for the industrial purposes.
Industrial roundwood logging volumes from forests in non-industrial private ownership were 3.9 million m3. The Finnish forest industry companies and the state harvested 1.1 million m3 of roundwood from their forests.
Besides, in June 2018, 333,000 m3 of wood was harvested in Finland for energy production.
In Sweden, notified area of final felling increased by 14% in June and by 4% in July, compared to corresponding months of last year, reports the Swedish Forest Agency.
Quarterly statistics during the year shows an increase of 34% in the second quarter of 2018 compared with the first quarter 2018. The second quarter of 2018, compared to the corresponding quarter of 2017, notified area of final felling increased by 7%.
The 14% increase in June corresponds to a total notified area of final felling to 30,136 hectares. This is the largest increase in June since 2012.
On the county level, notified area of final felling increased in 16 of 21 counties. The largest increase in notified area of final felling was reported in Västmanland by 50%, Stockholm by 44% and Västernorrland by 39%. The largest decrease was reported in Södermanland by -34%, Skåne by -27% och Örebro by -14%. On the regional level, notified area of final felling increased in all four regions.
In July 2018, the increase was lower in total notified area of final felling. The increase of 4% amounted to a total of 20,541 hectares. This is the largest increase in July since 2011.
On the county level, notified area of final felling increased in 11 of 21 counties. The largest increase in notified area of final felling was reported in Uppsala by 86% and in Östergötaland by 52%. The largest decrease was reported in in Västmanland by 48% and in Skåne by 44%. On the regional level, there was increase in Northern Sweden (Norra Norrland) by 8% and Central Sweden (Svealand) by 22% respective 22%. There was a decline in South of Northern Sweden (Södra Norrland) by two% and South Sweden (Götaland) by 8%.
During the first seven months of 2018, compared with 2017, there is an increase of 5% of notified area of final felling.
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For the 2Q 2018, Louisiana-Pacific Corporation (LP) reported net sales of $811 million, up from $694 million in the 2Q 2017. Adjusted EBITDA from continuing operations in the 2Q 2018 was $242 million compared to $167 million in the 2Q 2017.
LP reported income from continuing operations of $163 million, or $1.11 per diluted share, as compared to $95 million, or $0.65 per diluted share for the 2Q 2017.
“Our strong results this quarter demonstrate clear progress against our strategy to transform Louisiana-Pacific into a leading building solutions company,” said Brad Southern, LP CEO. “In fact, this was the best second quarter for LP since 2004, driven by steady execution from our team across the business, strength in OSB pricing as well as ongoing growth in our value added products. Each business – Siding, OSB, Engineered Wood and South America operations – delivered increased top and bottom line results on a year-over-year basis. We remain focused on executing on our key growth initiatives and delivering increased value to shareholders, including capital returns in the form of a new $150 million share repurchase authorization.”
For the six months ended June 30, 2018, LP reported net sales of $1.5 billion compared to $1.3 billion in the first six months of 2017. LP reported income from continuing operations of $258 million, or $1.76 per diluted share, compared to $150 million, or $1.02 per diluted share, for the same period in 2017. Adjusted EBITDA from continuing operations for the first six months of 2018 was $401 million compared to $281 million for 2017.
Louisiana-Pacific Corporation is a leading manufacturer of quality engineered wood building materials including OSB, structural framing products, and exterior siding for use in residential, industrial and light commercial construction.
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Ufkes Greentec b.v is a young, dynamic company specializing in wood chippers, stump grinders, wood cranes etc. Their machines are designed for professional users and meet the highest standards.
After working for several years in the service of a tree nursery, the brothers Daniël and Frank Beers started the company Beers & Beers Boomverzorging. Beers & Beers is a small and dynamic company that cooperates closely with a number of other professional tree care companies.
As a result, they are virtually always capable of finding a suitable solution in terms of working methods and the use of equipment. They work with certified European Tree Workers (ETW) and tree safety inspectors.
Western Forest Products Inc. reported adjusted EBITDA of $50.2 million in the 2Q 2018, compared to adjusted EBITDA of $47.1 million in the 2Q 2017, and $43 million reported in the 1Q 2018.
Operating income prior to restructuring and other income was $39.7 million in the 2Q 2018, compared to $37.7 million in 2Q 2017, and $32.6 million reported in the 1Q 2018. Increased lumber shipments and lower manufacturing costs in the 2Q 2018 more than offset the impacts of $11.7 million of US export lumber duty expense and significantly higher stumpage costs.
Net income for the 2Q 2018 was $27.1 million, as compared to $25.6 million for the same period of 2017. Increased revenue and lower operating restructuring items drove an increased net income that was partly offset by higher export lumber duties and income tax expense.
Western Forest Products Inc. is an integrated Canadian forest products company and the largest coastal British Columbia timberlands operator and lumber producer.
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Rayonier Inc. reported 2Q 2018 net income of $36.3 million, or $0.28 per share, on revenues of $245.9 million. This compares to net income of $26.2 million, or $0.20 per share, on revenues of $201 million in the prior year quarter.
2Q 2018 operating income was $51.6 million versus $46.9 million in the prior year period. 2Q adjusted EBITDA was $111.3 million versus $86.8 million in the prior year period.
“We are pleased to report strong results for the 2Q,” said David Nunes, President and CEO. “Southern Timber volumes increased 10% relative to the prior year quarter, as we fully integrated our prior year acquisitions in coastal Florida, Georgia and South Carolina. Weighted-average stumpage prices in Southern Timber were relatively flat compared to the prior year quarter.
“Pacific Northwest Timber results improved significantly driven by 36% higher harvest volumes and a 26% increase in both delivered sawtimber and pulpwood prices relative to the prior year quarter, reflecting strong domestic and export market conditions.
Excluding the prior year quarter timberland sales, New Zealand Timber results also improved significantly, driven by 20% higher harvest volumes and a 9% increase in both export and domestic sawtimber prices.”
Rayonier is a leading timberland real estate investment trust with assets located in some of the most productive softwood timber growing regions in the United States and New Zealand.
Photo: David Nunes, President and CEO Rayonier Inc
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The agreement between the Municipality of Braslovce, Slovenia, and Ministry of Infrastructure of Slovenia was signed. It lays foundations for the direct road connection to the BSW SI Gomilsko production facilities in the Municipality of Braslovce.
The agreement regarding the road connection was signed by Ms. Darja Kocbek, Director of the Directorate for the Land Transport (part of Ministry for Infrastructure), and Mr. Milan Šoštaric, Director of the Braslovce Municipality Office. The new third access road represents a strategic infrastructure investment for the Republic of Slovenia.
It will enable long term sustaninable transport, providing improved links for Slovenia with neighbourging countries, while being aligned with Braslovce local community development plans. The BSW SI Gomilsko facilties being developed are a signficant part of the future plans for the Braslovce Municipality.
Alex Brownlie, BSW Timber Commercial Director and Chairman of the Board of Directors in BSW SI, highlighted that BSW Timber investment plans in Slovenia have always included the requirement to purchase sawn timber from other Slovenian sawmills.
This work has begun with two sawmills and will continue into 2019. BSW SI is looking forward to working with other Slovenian sawmill companies, through trade and cooperation, to support and add value to Slovenian saw products from other mills, as well as its own for the global market.
Maibec concluded a transaction with Group Lebel of Rivière-du-Loup for their acquisition of the Maibec lumber mills located in St-Pamphile, Quebec and Masardis, Maine. The 315 employees of Maibec that are concerned by this transaction will maintain their employment with Groupe Lebel.
“Maibec will now focus on growing its pre-stained exterior siding’s systems based on lap sidings and shingles manufactured with solid wood or wood-based engineered material. Maibec recently announced the launching of the Maibec Resistech® siding systems manufactured on LP SmartSide® from Louisiana-Pacific,” added François Tardif, president of Maibec.
Maibec inc. is a family owned company from Quebec which has been involved in wood products manufacturing since 1946. Maibec is the most important Canadian manufacturer of genuine wood sidings and also the most important manufacturer of white cedar shingles in the East of North-America.
Group Lebel is a family business that has been working in forestry for over 60 years. Headquartered in Rivière-du-Loup in Lower St. Lawrence, it is deeply rooted regionally in 13 municipalities in Quebec and 2 in Ontario. Once the transaction is complete, the company will employ approximately 950 people through first, second and third transformation activities.
Weyerhaeuser Company reported 2Q 2018 net earnings of $317 million, or 42 cents per diluted share, on net sales of $2.1 billion. This compares with earnings of $24 million, or 3 cents per diluted share, on net sales of $1.8 billion for the same period last year.
Excluding net after-tax special charges of $15 million, the company reported net earnings of $332 million, or 44 cents per diluted share for the 2Q. This compares with net earnings before special items of $212 million for the same period last year and $275 million for the 1Q 2018.
Adjusted EBITDA for the 2Q 2018 was $637 million compared with $506 million for the 2Q of last year and $544 million for the 1Q 2018.
“I am very pleased with our 2Q financial results, as each of our businesses delivered solid operational performance and capitalized on market conditions to drive strong year-over-year improvement, including the highest Wood Products EBITDA on record,” said Doyle R. Simons, president and CEO. “In addition, we delivered Weyerhaeuser’s highest EBITDA since 2006, when the company’s operations were nearly three times larger than they are today. Looking forward, housing market fundamentals remain strong, and we remain relentlessly focused on driving operational excellence and fully capitalizing on market conditions to drive value for shareholders.”
Weyerhaeuser Company, one of the world’s largest private owners of timberlands, began operations in 1900.
Photo: Doyle R. Simons, Weyerhaeuser president and CEO.
Production of graded lumber will be sold to domestic and long-standing Rossi customers around the world. President Ted Rossi says the new mill will produce 50% more graded sawn lumber with the same staff and help to secure jobs for up to 250 local families for at least the next 40 years.
New Zealand’s booming export log market is starting to catch the jitters as concerns mount about the impact of US President Donald Trump’s trade war.
Demand for New Zealand logs has been strong over recent years as local sawmills compete with the export market to source logs for local construction, at a time when demand in China has stepped up after Asia’s largest economy clamped down on the harvesting of its own forests and reduced tariffs on imported logs to meet demand in its local market. However, trade tensions between the US and China are creating nervousness in the market, as traders fear tariffs will hurt economic growth and dampen demand.
“Positivity has permeated the industry, at least for those selling logs, for upwards of two-years,” AgriHQ analyst Reece Brick said in his latest monthly report on the forestry market. “However, it’s getting a bit nervy all of the sudden. That’s not to say everyone’s panicking, but there are certainly more reasons to frown than we’ve seen for a long-while.
“The export scene, along with the rest of the world, is trying to figure out what the outcomes will be of the tiff between the US and China. Economic growth data, stock exchange indices and foreign exchange rates have all made unfavourable movements in the past month, and there’s little sign that the relations between the two countries is on the mend.”
Brick’s comments about nervousness in the log market echo similar concerns noted by industry watchers in the dairy and wool industries recently, where demand is said to have weakened as buyers are concerned that tariffs on end products will flow back to dent demand for New Zealand commodities.
“If there’s a common enemy for NZ log traders it’s President Trump,” said AgriHQ’s Brick. “Another month of the US and China passing tit-for-tat trade tariffs is creating global economic uncertainty, understandably causing some nerves given log values are highly reliant on macro-economic strength.”
The US and China this month imposed tariffs of 25 percent on US$34 billion of each other’s exports and US tariffs on an additional US$16 billion of Chinese goods are coming soon. The US government also said last week it was readying new tariffs on Chinese goods worth an additional US$200 billion.
Brick noted the latest set of economic data out of China indicates the trade war is already impacting China’s economy, with second-quarter growth slowing to 6.7 percent, its slowest rate of growth in almost two years, and expectations for a further decline in the third quarter.
“The consensus in the market place is that the trade tension between China and the United States could cause an economic downturn,” Brick said. “The International Monetary Fund condemned President Trump’s trade policy and advised governments to bulk up savings. The escalating trade tension may hinder global growth and delay foreign investments worldwide.
“The main issue is the nervousness that is reverberating throughout the globe, slowly rippling into NZ. Sentiment within the NZ market is mixed – the more risk averse are preparing for a drop beyond the short-term, while quite a few others are thinking this is a temporary, storm-in-a-teacup situation. Either way, no-one can be certain.”
AgriHQ’s monthly survey of exporters, forest owners and saw millers showed the average price for structural S1 logs in the New Zealand market edged up to $136 a tonne this month, from $135 a tonne last month, and marking the highest level since 1993. The average price for New Zealand A-grade export logs held steady at a four-year high of US$145/JAS.
Integrated Australian forestry and timber processing company, Associated Kiln Driers ( AKD ) is pleased to confirm that it has signed an agreement with Carter Holt Harvey (CHH) to acquire all of the shares of Carter Holt Harvey Timber Pty Ltd (CHHT). CHHT owns CHH’s New South Wales sawmilling business.
The major assets of the business comprise the Tumut sawmill and Gilmore treatment facility in Tumut, a 50% interest in the Highland Pine Products (HPP) joint venture in Oberon and a distribution centre in Berkeley Vale.
The Tumut sawmill processes approximately 565,000 m3 of sawlogs and produces a range of predominantly structural products primarily for supply in NSW. The Gilmore treatment facility is a value adding site located in close proximity to the Tumut sawmill. HPP processes approximately 600,000 m3 of sawlog, producing a range of timber products.
AKD currently processes over 1,000,000 m3 of sawlog across its Colac, Caboolture and Yarram sawmills and has over 600 employees. Commenting on the proposed acquisition, AKD’s Chief Executive Officer, Shane Vicary said, “the acquisition represents an excellent fit with AKD’s existing operations in Victoria and Queensland and is consistent with AKD’s strategy of operating high quality, well-located sawmills”.
“We are very enthusiastic about the acquisition and look forward to working with the existing CHHT employees and providing all AKD employees with enhanced opportunities across the wider AKD group as a result of this transaction”. Completion of the transaction is expected to occur in the fourth quarter of 2018.
Source: AKD Softwoods
Wooden tires don’t have the best ring to them, but Michelin firmly believes they’ll be a reality in 2020.
Cyrille Roget, Michelin’s worldwide director of scientific and innovation communication, said the plan is to create more sustainable tires in the future, and experiments with wood waste have provided a solution.
The tire maker will incorporate elastomers from wood chips to replace a tire’s oil content. Today, 80 percent of materials found in tires come from oil. In the future, that percentage will drop to 20 percent by 2048, Michelin believes. And rubber will also be included, which Roget said is also sustainable.
“Trees grow everywhere. So you re-distribute the opportunity for everyone to have local sourcing. And they are renewable,” Roget added.
Much further into the future, Michelin not only foresees tires made from wood, but also a single set of tires for a car’s lifetime. The company believes one day that 3D printing will revolutionize the tire process. Where today drivers must physically change tires after the tread wears down, 3D printers could conceivably “recharge” tread. In layman terms, a 3D printer would print new tread when the tread eroded to an unsafe level. Roget even pictured a day when an electric car charging station also includes a 3D printer to “recharge” tire tread.
3D-printed tires are further down the line, perhaps 15 years at minimum, Roget said, but Michelin hopes to show its first tire made from wood in less than two years.
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LINX Cargo Care Group, and its subsidiary C3 Limited, has announced that it has been successful in its bid to acquire Pedersen Group, a market leading provider of wood chipping and woodyard management services to pulp and paper mills, and forest owners in Australia and New Zealand.
Pedersen Group handles over 8.3 million tonnes per annum of wood fibre across its operations, in the form of logs, wood chip and hog fuel. The company employs 140 people across Australia and New Zealand and has an existing joint venture with C3 Limited, which provides wood yard management services to customers.
LINX Cargo Care Group is delighted to enter into a purchase agreement with Pedersen Group and take the next step in the evolution of both companies, which is expected to be completed mid-August.
Pedersen Group CEO Gavin Hudson said the conditional agreement reached this week will provide the Pedersen Group with an aligned and committed long-term owner, which will enable Pedersen Group to continue to focus on providing critical services to its customers.
“We are delighted to finalise this agreement with LINX Cargo Care Group. The acquisition of Pedersen Group by LINX Cargo Care Group will provide long-term stability for our employees and customers, and the operational and financial capacity to allow our business to pursue its growth aspirations”, Mr Hudson said.
Anthony Jones, Group CEO for LINX Cargo Care Group and Chairman of C3 Limited said the acquisition of Pedersen Group brings a complementary service offering to customers, including a highly skilled workforce who specialise in wood chipping and woodyard management.
“LINX, C3 and Pedersen share a long and rich history in the forestry industry. Our combined expertise and experience will provide an enhanced customer offering, further access to capital, and the opportunityto collaborate and collectively grow into the future,” he said.
“We are very excited to welcome Pedersen Group to LINX Cargo Care’s group of companies. Pedersen’swill enable our organisation to grow its services to forest owners and wood processing businesses. In addition, Pedersen’s capabilities and services complement C3’s existing customer offering and willextend our reach to a customer base in diversified global markets.
“The synergies and strategic alignment between Pedersen’s and C3’s forestry business is significant. Importantly, our company values are closely aligned, and we very much look forward to welcomingPedersen’s talented and highly skilled workforce to the team,” Mr Jones said.
Pedersen Group will continue to operate independently under the Pedersen brand following the completion of the acquisition, and all Pedersen employees will be retained by the new owner.
The Indian log market has reached China price parity with ‘A’ longs now selling for USD 159-160/JASm3. While volumes delivered to this market are 14% down year on year to May 2018, it has been a steady market and exporters still expect an increase in demand in Q4.
There is an increased schedule of ship arrivals from NZ over the next six weeks, so this will be a good test of this market. Containers of logs are also arriving from Germany, South Africa and southern yellow pine from the USA.
The labour shortage mentioned in previous Wood Matters continues, but some labour has returned to the mills from agricultural work. Log stocks are about 120,000m3 in Kandla and 30,000m3 in Tuticorin. The cash flow of log buyers is still tight after the introduction of GST and the increased scrutiny on bank lending compounding the weakening of the Indian Rupee against the US dollar.
Source: PF Olsen Wood Matters
The domestic market is still relatively flat for structural sawn timber and there are a few mills around the country reducing production slightly by undertaking maintenance etc. Sales of clear-wood timber are still relatively strong, with stable domestic demand and very strong demand from export markets.
The PF Olsen Log Price Index remained at $132 for July. While prices for pruned logs decreased in a couple of regions around the country, this was balanced by an increase in sale prices for structural logs, as well as pulp logs in the CNI. The index is currently $11 above the three-year average.
Domestic Log Market
Mills report that their markets are the same as last month with good demand for clear-wood sawn timber. Domestic demand has been steady and export markets have been very stable with increasing demand due to strong construction figures in both Europe and the USA. Some mills are actually oversupplied with pruned logs and are having to limit log supply, as many forest managers have scheduled winter harvesting in the flatter blocks with easier access that tend to be pruned.
The domestic demand for structural timber is still flat. Actual housing starts in New Zealand seem to be about 20% behind consents granted. Market commentators aren’t too sure of the reason(s) why this is the case. Many mills in NZ aren’t “busting a gut” with production and some are taking extra days off for worker rotation and maintenance etc.
Overseas, the prices for lumber in Maine, USA have doubled in the last six months. The US construction industry has rebounded with pent up demand for new houses and renovations after the recession and rebuilds and renovations required after recent hurricanes and other weather events that require. This surge in demand has coincided with a restricted supply of lumber. This restricted supply is caused by a combination of some significant forest fires in western Canada last year that caused some mills to close for two months, the trade dispute between the United States and Canada, and a shortage of railcars and trucks to move the product.
The European Organisation of the Sawmill Industry (EOS) held its Summer General Assembly in Oslo in June. Their softwood sawn-wood markets were in general described as ‘rosy’ due to healthy construction in Europe and lively demand from importers with the two main markets being the US and China. Collectively their main concerns were around log supply (Sound similar to NZ?). This lack of raw supply is even more pronounced for hardwood mills as hardwood logs are exported to China. (As an example, in 2013 the EU exported 200,000m3 of oak logs to China, and in 2017 exported 600,000m3). These factors indicate there is unlikely to be any significant increase in production and export to countries to which NZ sawmills export sawn timber. European sawmills actually see a window of opportunity to supply the US.
Exporters of NZ sawn timber have not yet seen any reduction in demand from China due to the weakening of the Chinese Yuan (CNY). The chart below shows the deprecation of the CNY against the YSD over the last month.
Report: Scott Downs Business Development Manager PF OLSEN
Södra reported sustained strong operating profit of SEK 1,318 million ($149 million) for the 2Q, the best quarterly result ever. The market trend was positive for all of the company product categories and completed investments, efficiency improvements and restructuring are reflected in the result.
Consolidated net sales for the 2Q rose 26% year-on-year to SEK 6,626 million ($751 million), and the operating margin strengthened to 20%. For the first half-year, operating profit totalled SEK 2,257 million ($256 million) – the strongest half-year figure in Södra’s history. Return on capital employed rose to 26% and the equity ratio was 57%.
In the Södra Skog business area, operating profit totalled SEK 49 million ($5.6 million) for the period. The result was impacted by continued weather challenges. Following a cold and snowy winter that made transportation difficult, the dry conditions of recent months have increased the fire danger and significantly impacted forest operations.
In the Södra Wood business area, operating profit totalled SEK 210 million ($23.8 million) for the period, mainly reflecting the positive price level for sawn timber but also the ongoing restructuring process. The result refers solely to the sawmill operations, since the Interior Wood segment has largely been discontinued and is now reported under Other segments.
In the Södra Cell business area, operating profit totalled SEK 1,196 million ($136 million) for the 2Q. The profit trend was mainly attributable to the high price level, a favourable USD exchange rate and the higher volumes enabled by expansion of the pulp mill at Värö.
In the State of Mato Grosso, Brazil, there are some 3.2 million hectares of sustainably managed forests and this is expected to rise to 6 million hectares by 2030, as ITTO reports.
In all 44 municipalities in Mato Grosso the domestic economy is driven by the forestry sector which ranks 4th amongst all economic sectors. In 2017 the forestry sector contributed more than R$47 million ($12.6 million) in taxes and over R$16 million ($4.3 million) towards the State Fund for Transportation and Housing (FETHAB).
Forest management in Mato Grosso is very complex and involves compliance with numerous regulations. In addition, authorisations and supervision of forestry activities, including harvesting, transportation and trade, involves several government agencies and the Brazilian Federal Highway Police making management overly bureaucratic.
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Sveaskog’s 2Q 2018 net sales rose to SEK 1,918 million ($216 million), an increase of 13%. Sales of wood raw material amounted to 2.9 million cubic metres.
Operating profit from continuing operations increased by 12% and amounted to SEK 382 million ($43 million). The improvement in earnings is mainly an effect of higher prices. Difficult soil scarification and planting conditions led to a lower level of silvicultural activity. This had a negative effect on external sales of seeds and seedlings.
Profit for the 2Q 2018 increased by 108% and amounted to SEK 914 million ($103 million). New corporate tax rules resulted in lower deferred tax and therefore a lower tax expense which improved earnings by SEK 477 million ($53.7 million).
1H 2018 net sales, which comprise both deliveries from Sveaskog’s own forests and externally procured wood raw material, increased by 8% to SEK 3,567 million ($402 million). Sales of wood raw material amounted to 5.8 million cubic metres.
Operating profit from continuing operations increased by 7% and amounted to SEK 775 million ($87.3 million). Higher prices were offset to some extent by a 7% decrease in delivery volumes from own forests.
The main cause was the extremely snowy winter and record-dry early summer which had a negative impact on felling, soil scarification, planting and external sales of seedlings and seed. This has led to a delivery mix with a lower proportion of deliveries from own forests. On an annual basis, the delivery mix is expected to normalize.
Profit for the first six months of 2018 increased by 67% and amounted to SEK 1,301 million ($146 million).
Sveaskog is Sweden’s leading forest company and sells sawlogs, pulpwood, biofuel, forest seedlings and silvicultural services.