Every one of Södra’s four business areas lost money in the second quarter, tipping Sweden’s largest forest-owner association to a 424 million Swedish kronor operating loss, with weak demand for sawn timber, pulp, and cross-laminated timber still trailing the cost of the wood feeding its mills. That is according to President and Chief Executive Lotta Lyrå, who signed the co-operative’s half-year accounts in Växjö on Thursday, showing quarterly net sales of 6,947 million kronor, down from 7,193 million, and a deficit deeper than last year’s 389 million.
Nowhere is the damage heavier than at the sawmills, where Södra Wood has swung from a 3 million kronor profit a year ago to a 215 million kronor loss, on lower delivery volumes, slightly softer prices, and higher raw-material costs. Production for the quarter fell 43,000 cubic metres to 402,000, and the sawmilling deficit for the half now stands at 530 million kronor, compared with a 17 million kronor profit this time last year.
Relief is coming from the price Södra pays for wood rather than the price it gets for its products, with the co-operative cutting what it pays members for sawlogs and pulpwood on 18 June, after storms Johannes and Dave swelled the supply of storm-felled wood. Lyrå writes that current purchase prices would have been worth 400 million kronor to the quarter’s operating result had they taken full effect in the period, a delay she attributes to inventory levels in the value chain.
One planned maintenance stop at the Mörrum pulp mill left the quarter’s costs 100 million kronor higher than the first three months, even as the group’s contribution margin recovered from 17 per cent to 22 per cent.
It comes as Vida closed two sawmills and 265,000 cubic metres of capacity in the same Götaland fibre catchment this year, extending the squeeze that has run through Södra’s accounts since last autumn.
A year into its Södra Leap action programme, the co-operative has cut overheads by 329 million kronor, 202 million of it inside the quarter, with consulting costs nearly halved, heavy IT projects completed, and 245 fewer employees than a year earlier. Continuous-improvement work added 122 million kronor of efficiency gains over the same three months, including a new data-driven tool linking every saw run to its actual timber yield, the latest step in an automation push that began with a world-first AI scanning system.
Pulp is the one heavyweight improving, with Södra Cell narrowing its quarterly loss to 88 million kronor from 221 million as deliveries climbed 29,000 tonnes and maintenance costs eased. Bioproducts went the other way, with sales up 26 per cent to 888 million kronor on tall oil and electricity, two of the few markets where demand and prices held firm.
Construction remains the slowest market of all, with Building Systems losing 45 million kronor on flat sales of 63 million and cross-laminated timber deliveries slipping to 5,337 cubic metres for the quarter. Even so, Södra completed its 22,000 square metres of CLT deliveries to Kaj 16 during the quarter, with the 78-metre tower set to stand as Gothenburg’s tallest timber building and export activity picking up.
January’s sale of the Baltic forest estate leaves the co-operative holding 16.7 billion kronor in cash and short-term investments, even after paying this year’s 696 million kronor dividend to members. The sale of its SunPine stake, completed after the quarter closed, is expected to add to the third-quarter result, and Lyrå is not ruling out further cost measures.
Excluding the 1,473 million kronor gain on the Baltic sale, the report puts Södra’s underlying operating loss for the first half of 2026 at 1,003 million kronor. The next test of that number comes on 22 October, when the co-operative reports its third quarter to its 52,092 member forest owners.
