SCA Interim Report Q2 2020

JANUARY 1 – JUNE 30, 2020 (compared with January 1 – June 30, 2019)
*Net sales declined 8% to SEK 9,480m (10,304). The lower sales were mainly related to lower selling prices.
*EBITDA amounted to SEK 2,031m (2,900), a decrease primarily due to lower selling prices
*Operating cash flow was SEK 614m, (1,245).

Earnings for the second quarter of 2020 were in line with the preceding quarter, but declined year on year.

The quarter was marked by the uncertainty surrounding the coronavirus pandemic, with demand for SCA products at a generally lower level than in the preceding quarter. The publication paper product area was most affected, due to a significant drop in demand for marketing and print advertising. Delivery volumes also decreased for the Pulp and Paper segments. The Wood segment reported improved earnings compared with the preceding quarter. During the quarter, SCA continued to take a number of measures to protect employee risk groups, reduce the spread of the virus and ensure that production and operations are maintained. SCA has a continued strong focus on cost control and cash flow, and has a solid financial position and strong liquidity.

The supply of wood to SCA’s industries was stable during the quarter. Wood consumption declined slightly during the period due to lower delivery volumes and the planned maintenance stop at Obbola. The price of timber and pulpwood remained stable.

The market for the Wood segment strengthened during the quarter, driven by strong demand in the building materials trade in Scandinavia and the rest of Europe. Market prices rose slightly compared with the preceding quarter.

Production volume in the Pulp segment was maintained at the same level as preceding quarter but deliveries decreased, due primarily to falling demand for pulp for publication paper. The average selling price during the quarter was slightly higher than the preceding quarter due to the price increase implemented at the beginning of the period.

Demand in the kraftliner product area weakened during the second quarter following a strong first quarter. SCA implemented a price increase at the start of the second quarter and the prices were therefore higher than in the preceding period. A planned maintenance stop was carried out at Obbola during the period, and the expansion project is progressing on schedule and on budget.

Demand in the publication paper product area decreased by between 30% and 40% for SCA’s grades during the quarter compared with last year. SCA has adjusted production levels to the prevailing market situation. The price of publication paper was stable for the period.
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