SCA Q3 2024 Performance Report

SCA (Svenska Cellulosa Aktiebolaget) saw robust growth in Q3 2024. CEO Ulf Larsson reported a 22% increase in sales to SEK 5.2 billion and a 42% rise in EBITDA to SEK 2 billion. The EBITDA margin reached 38% due to higher prices and increased volumes despite challenges in the Renewable Energy segment and maintenance expenses. The net profit was approximately SEK 1.1 billion ($1.52 per share). The company maintained a low leverage ratio of 1.6%, with net debt to equity at 11%.

Key Takeaways

• Sales: Increased 22% to SEK 5.2 billion.
• EBITDA: Rose 42% to SEK 2 billion, with an EBITDA margin of 38%.
• Wood Segment: Sales up 23%, EBITDA up 79%.
• Pulp Sales: Increased 27%, EBITDA surged over 200%.
• Containerboard: Sales up 15%, EBITDA up 26%.
• Renewable Energy: EBITDA decreased by 36%.
• Operating Cash Flow: SEK 708 million for the quarter.
• Long-term outlook for forest land values remains positive.

Company Outlook

• Stable prices expected in Q4, market considered balanced.
• Seasonal drop in delivery volumes anticipated.
• Lower interest rates viewed positively for long-term forest land values.

Bearish Highlights

• Decline in Renewable Energy EBITDA.
• Net profit impacted by maintenance costs.
• Concerns over stricter forest management policies.
• Slight drop in Baltic forest land prices.

Bullish Highlights

• Strong performance in Wood and Pulp.
• Steady demand for forest products anticipated.
• Strategic projects like the Obbola mill to boost long-term performance.
• Active forest management planned to optimize growth.

Challenges

• Lower deliveries and sales in Forest segment.
• Weaker pricing in Renewable Energy.

Q&A Session Highlights

• SCA will manage forests actively despite potential policies.
• Open to acquisitions in the Baltic region if favorable.
• Stable timber prices expected in Q4, no significant changes compared to Q3.

SCA's third-quarter results showcase the company's ability to tackle market challenges and leverage strategic investments to sustain growth. The next quarterly report is expected in January, promising further insights on SCA's initiatives and performance.