Hygiene products bolster SCA results, paper profits down
SCA reports mixed results in the first quarter this year, restructuring continues.
Sales growth and improved earnings in its hygiene operations stepped up SCA's total sales and operating profits in the first quarter of the year. Lower earnings in its Forest Products division, resulting from negative exchange rate effects and lower sales prices for publication paper, had a dampening effect on total results.
In the first quarter of 2013, SCA posted an operating profit of SEK1.79bn (2012: SEK1.68bn), excluding items affecting comparability operating the profit amounted to SEK2.21bn (SEK1.83bn). Sales went up 15% (20% excluding exchange rate effects and divestments) to SEK22.39bn (2012: SEK19.49bn). The group's net profit for the period amounted to SEK1.14bn (SEK1.23bn).
Earnings improved as a result of acquisitions in Europe, higher volumes, lower material costs and cost savings, SCA explained in its Q1 report. Profits for the personal care and tissue business rose 21% and 34% respectively and 27% and 40% excluding exchange rate effects. The quartterly operating profit for the forest products division (publication paper, packaging paper, pulp, solid wood products and renewable energy) fell 22% mainly due to lower prices sales prices and negative exchange rate effects.
During the first quarter this year, SCA completed the divestment of its Austrian publication paper mill in Laakirchen to Heinzel Group for an initial price of €100m. Last year the mill recorded total sales of about €316m. SCA also divested certain consumer tissue businesses to comply with conditions imposed by the European Commission relating to SCA's acquisition of Georgia-Pacific's European tissue operations in 2012. In January last year, an agreement was reached with DS Smith on the divestment of SCA's packaging operations, excluding the two kraftliner mills in Sweden. Operations sold were deconsolidated on 30 June last year.
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