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2018-10-17

Setra reports growth in profit for third quarter

Wood products company Setra is reporting an operating profit of SEK 287 million (107) for the period January–September 2018. Net sales totalled SEK 3,325 million (3,027). Operating profit for the third quarter amounted to SEK 54 million (17), with net sales of SEK 966 million (945).  

“We’re reporting an operating profit for the first three quarters of SEK 287 million, which is an improvement of SEK 180 million on the previous year. USA and Europe have been extremely strong markets. The building trade in Sweden has been subdued because of the hot summer, although industrial construction remains strong. We have seen some uncertainty in some markets during the third quarter, with the Chinese market in particular afflicted by a drop in deliveries and falling prices. This is seen as a temporary setback, however, as consumption is fundamentally strong. Deliveries to Egypt have also fallen, primarily due to a shortage of USD. However, other markets have been able to compensate”, explains Hannele Arvonen, President and CEO at Setra.

Setra is currently preparing to begin sawing timber damaged by fire at its mill in Färila.
“We’re stepping up in order to recover as much value as possible”, said Arvonen.

Setra is developing a new wood products centre in Långshyttan. The manufacture of components for doors and windows is getting under way in October, with production of CLT scheduled to be running in first half of 2020. A new trim saw with integrated planing machine is to be installed in Hasselfors, and is set to be up and running in second quarter of 2020. All in all, these investments will enable Setra to deliver a high level of processing and competitiveness in the wood industry.

Setra and Preem have entered into an agreement on the production of renewable biofuel, with a production facility planned at Setra’s Kastet Sawmill in Gävle. The plant, which will convert sawdust into pyrolysis oil, is estimated to provide around 25,000 tonnes of oil each year, which will be refined into biofuel via Preem’s refinery in Lysekil. The operation has been granted an environmental permit. Additional factors are being investigated before the facility gets full approval to start up.

Cash flow from operating activities for the period January–September amounted to SEK 318 million (222). The Group’s financial position is strong. The Group’s financial net debt amounted to SEK -120 million (14) at the end of the period, which corresponds to a net debt/equity ratio of -8% (1).

Key figures Jul–Sept (3 mths)   Jan–Sep (9 mths)  
       2018           2017                   2018          2017
Net sales, SEKm     966            945                  3,325         3,027
Operating profit, SEKm       54              17                     287            107
Profit after tax, SEKm       50                9                     231              75
Operating margin, %      5.6             1.8                      8.6             3.5
Return on operating capital, %, 12 months                        24.2           12.2
Cash flow from operating activities, SEKm     207            126                     318            222