Holmen AB reported a decrease in operating profit for the first quarter of 2024, with figures dropping to SEK 944 million from SEK 1,737 million in the same period last year, marking a 17% operating margin. This decline was largely attributed to reduced paper prices and the absence of last year's income from surplus electricity sales. However, compared to the fourth quarter of 2023, the operating profit saw an increase of SEK 230 million, mainly due to the negative impacts of a major maintenance shutdown in the previous quarter, which cost SEK 180 million.
The company's profit after tax for January to March stood at SEK 744 million, down from SEK 1,371 million in 2023, with earnings per share decreasing to SEK 4.7 from SEK 8.5.
Henrik Sjölund, CEO and President of Holmen, noted in his comments on the interim report that despite subdued consumption and construction activity due to high central bank interest rates aimed at containing inflation, the company managed to deliver "good profit" thanks to strong earnings from its forest, hydro power, and paper segments.
The report highlighted that while the forest industry operated below full capacity, competition for logs and pulpwood remained fierce, driving wood prices up and enhancing forest segment profits to SEK 452 million. On the energy front, profits stood at SEK 208 million, consistent with the previous quarter, despite higher electricity prices and lower hydro power production.
Image: Holmen
The wood products market faced challenges from weak construction activity, resulting in a SEK -26 million loss for the segment. In contrast, the consumer paperboard market showed signs of recovery, with stable prices helping to achieve a profit of SEK 370 million in the board and paper segment.
Holmen has also committed to further investments in renewable energy, with SEK 1.5 billion allocated for the construction of Blisterliden Wind Farm, expected to increase electricity production by 20%.
Sjölund emphasized Holmen's robust business model, which capitalizes on the company's vast forest holdings and focuses on forestry, renewable energy, wood products, and process industry operations, positioning the company for continued success in a transitioning fossil-free society.
