In the first quarter of 2021, SCA reported net sales of SEK 4,172m, down from SEK 4,793m in the same period last year. Excluding the impact of discontinued publication paper operations, sales increased by 8%. EBITDA rose 32% to SEK 1,359m, driven by higher selling prices across all product areas. Operating profit improved to SEK 1,046m and earnings per share increased to SEK 1.14.
The company has discontinued its publication paper operations, focusing on growth in other product areas, which positively impacted the EBITDA margin, reaching 32.6%.
SCA has announced plans to acquire 19,150 hectares of land in Latvia, of which 13,100 hectares are designated as forest land. The acquisition is priced at EUR 44.5 million (approximately SEK 450 million). The standing timber volume on the site totals 1.8 million m³. This acquisition is part of SCA's strategy to expand its holdings in the Baltic states, having already acquired 30,000 hectares in Estonia and Latvia. The deal is expected to close in Q4 2020.
SCA has announced its decision to cease production of publication paper, redirecting SEK 1.45 billion towards the production of chemically pre-treated thermo-mechanical pulp (CTMP) at the Ortviken site. This strategic shift follows consultations with employee representatives affecting approximately 800 employees. CEO Ulf Larsson emphasized the declining market for publication paper and expressed commitment to finding optimal solutions for affected staff. The move aligns SCA with markets demonstrating healthy growth prospects.
The Board of Directors of SCA has announced that it will not propose an extraordinary general meeting in 2020 to resolve on dividend distribution. This decision is based on current circumstances, with plans to provide a dividend proposal during the customary interim report for Q4 2020. In 2019, SCA reported sales of approximately SEK 19.6bn (around EUR 1.9bn) and employed about 4,000 individuals, emphasizing its standing as Europe's largest private forest holding, involved in various forest-related products and services.
SCA plans to invest SEK 1.45bn in producing chemically pre-treated thermo-mechanical pulp (CTMP) at its Ortviken paper mill, aiming for an annual production of 300,000 tonnes. This transition includes discontinuing publication paper production due to a consistent decline in demand, exacerbated by a 30-40% drop during the pandemic. The strategy is expected to generate a positive EBITDA effect of SEK 0.3bn annually. The closure will impact approximately 800 employees and entail non-recurrent costs estimated at SEK 0.9bn.