In This Article:
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Operating Profit: Over $1 billion SEK in Q3.
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Return on Capital Employed: 16% for the last year, average 18% over the last 10 years.
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Net Debt: 6% of equity, approximately $3.5 billion SEK.
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Cash Flow from Forest Activities: Increased by 60% over the last three years.
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Electricity Prices: Lowest in Sweden in the last 20 years during Q3.
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Log Costs: Record high, 50% higher than three years ago.
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Board and Paper Division: Strong performance with stable prices and favorable mix.
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Seasonal Cost Reduction: $80 million SEK lower in Q3 compared to previous quarter.
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Expected Q4 Impact: Profit impact of $250 million SEK due to maintenance and rebuild.
Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Holmen AB (HLMMF) achieved an operating profit of over $1 billion in the third quarter, driven by strong performance in board and paper segments.
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The company has maintained a strong financial position with a return on capital employed of 16% over the past year.
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Holmen AB (HLMMF) has successfully increased cash flow from forest activities by 60% over the last three years.
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The board and paper division showed a stellar performance, with a strong mix and good volumes contributing equally to EBIT.
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Holmen AB (HLMMF) has been able to distribute significant returns to shareholders through dividends and share buybacks, amounting to $6 billion.
Negative Points
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The company faces challenges due to high log costs, especially in the southern parts of Sweden, impacting the wood products segment.
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Electricity prices in Sweden were at a 20-year low, affecting revenue from renewable energy operations.
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The wood products market is experiencing weak demand and high log costs, leading to operational challenges.
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Holmen AB (HLMMF) anticipates a headwind in Q4 due to maintenance shutdowns and lower demand in the board and paper division.
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The company is facing a challenging market environment with oversupply and high costs, particularly in the sawmill operations in southern Sweden.
Q & A Highlights
Q: Looking forward to Q4, how do you see the demand for consumer paperboard, and what impact will the maintenance shutdowns have on earnings? A: The outlook for Q4 is challenging due to lower demand for consumer paperboard in Europe and the impact of maintenance shutdowns, which are expected to affect earnings by about $250 million. The lag between log prices and end product prices for wood products is roughly 6 to 8 months.