Holmen’s year-end report 2021

• Operating profit for 2021 amounted to SEK 3 731 million (2020: 2 479). Excluding the item affecting comparability related to the damaged turbine at the paperboard mill in Workington, operating profit increased by SEK 1 582 million to SEK 4 061 million as a result of higher prices for wood products and the expansion of the wood products business.
• Operating profit for the fourth quarter excluding the item affecting comparability was SEK 1 185 million, compared with SEK 1 129 million in the third quarter. The sale of a British forest property had a positive impact on profit of just over SEK 200 million, while lower wood product prices had a negative impact on profit.
• Profit after tax in 2021 amounted to SEK 3 004 million (1 979), which corresponds to earnings per share of SEK 18.5 (12.2).
• Prices for forest properties continued to increase in 2021, which meant that the recognised value of forest assets during the annual revaluation increased 9 per cent from SEK 43 202 million at the beginning of the year to SEK 47 080 million.
• The Board proposes an ordinary dividend of SEK 7.50 per share and an extra dividend of SEK 4.00 per share.

CEO comments
2021 was characterised by a rapid economic recovery with a shortage of various input goods and logistics resources, which led to increased prices in extensive parts of society. With our own forest and energy production as a foundation, we at Holmen have nevertheless been able to advance our positions in several segments, at the same time as profit has increased to a historically high level. In light of the solid earnings development and our strong financial position, the Board propose an increased dividend from SEK 7.25 to SEK 7.50 per share and an extra dividend of SEK 4.00 per share.

Fourth quarter earnings totalled SEK 1 006 million thanks to a solid performance in wood products and renewable energy, as well as the sale of a forest property in the UK.

In the wood market, the competition for logs continued to be significant and prices increased, while the pulpwood market was more balanced. Fourth quarter earnings from forest, SEK 513 million, were higher than usual due to the sale of the British forest property. Interest in owning forest is strong and forest property prices continued to increase during the year, which increased the value of the Group’s forest assets by 9 per cent to SEK 47 billion.

Demand for paperboard for consumer packaging gradually increased and prices increased at the end of the year. The turbine in Workington, which was damaged in June, remained out of commission, which entailed high energy costs but has not affected paperboard production. Adjusted for the effects of the damaged turbine, fourth quarter earnings totalled SEK 281 million, including a bonus for green electricity certificates. The turbine in Workington is expected to be put back into service during the first quarter of 2022. The market situation is favourable and we continue to improve our customer and market mix.

The paper market has been turbulent in the autumn and although demand has decreased, market prices for 2022 have increased substantially, driven by increasing production costs. Our earnings decreased in the fourth quarter to SEK -9 million due to extremely high electricity prices. We continue to develop our book and magazine paper products at the same time as we are focusing on segments in the packaging area, where our fresh fibre products are best utilized.
more at source: http://investors.holmen.com/files/press/holmen/202201289627-1.pdf

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