Södra has reported a significant deterioration in its 2025 financial performance, with weaker demand, rising raw material costs and unfavourable currency movements pushing the Swedish forest‑owner cooperative into a full‑year loss.
Net sales fell 4% to 28.30 billion kronor, while the operating result swung to a loss of 1.29 billion kronor, compared with a 2.63 billion kronor profit in 2024. Return on capital employed dropped to –5% from 10% a year earlier, and the equity ratio slipped to 56%.
The company said its operating performance worsened by 3.4 billion kronor year‑on‑year, estimating that higher raw material prices, currency effects, and lower demand collectively reduced earnings by around 4.0 billion kronor. Of that, 2.2 billion kronor was attributed to raw material costs and 1.8 billion kronor to currency movements. The contribution margin fell from 33% at the start of 2025 to 24%.
Despite the downturn, Södra highlighted several operational improvements. Overhead costs were reduced by 380 million kronor, pulp production reached a record 1.9 million tonnes, and Södra Wood reported improved lumber recovery. Continuous improvement initiatives delivered 518 million kronor in gains, though the company noted the full benefits have not yet flowed through to results.
Business units under pressure
- Södra Skog posted an operating loss of 14 million kronor, compared with a 513 million kronor profit the previous year. Demand for sawlogs and pulpwood remained stable for most of the year but weakened toward year‑end, except for spruce sawlogs.
- Södra Wood reported a 463 million kronor operating loss, reversing a 23 million kronor profit in 2024. The division cited lower volumes, higher delivery prices and sharply increased sawlog costs.
- Södra Cell recorded a 258 million kronor operating loss, down from a 2.87 billion kronor profit a year earlier. Unfavourable currency rates and higher raw material costs were the main drivers, partly offset by higher production volumes.
- Södra Building Systems posted a 168 million kronor loss, slightly worse than the 157 million kronor loss recorded in 2024, with higher raw material costs only partly offset by increased invoiced volumes.
Södra’s board has proposed a profit distribution to members totalling 616 million kronor, including 560 million kronor linked to timber deliveries and a 56 million kronor member equity issue. The proposal will be considered at the annual meeting in Jönköping on June 2.
The company said it continues to invest in long‑term earnings capacity, including the decision to proceed with the Kinda sawmill and the start of construction on a lignin plant in Mönsterås. It has also decided to sell its forest holdings in the Baltic states to sharpen its focus on members’ forests and strengthen the balance sheet.
Revenue from Södra Bioproducts fell to 3.55 billion kronor in 2025, down from 3.82 billion kronor the previous year, with the business area’s results reported within other divisions.
