Holmen (HOLM) Q1 2025 earnings summary

Executive summary

• Achieved strong Q1 2025 results with operating profit rising to SEK 988 million and a 17% margin, driven by robust board and paper performance and lower energy costs, despite challenging and uncertain market conditions.

• Maintained a strong financial position post-dividend, with net debt at 6–10% of equity and a decade-long average return on capital employed of 19%.

• Dividend of SEK 1.9 billion (SEK 12 per share) paid in April, with share buybacks of up to 3 million shares or SEK 119 million conducted in Q1.

• Higher deliveries in board and paper, reduced impact from shutdowns, and stable prices supported profit growth, but market uncertainty increased due to tariffs and raw material shortages.

Financial highlights

• Operating profit (excluding items affecting comparability) reached SEK 1,737 million in Q1 2025, up from SEK 1,166 million in Q1 2024; net sales were SEK 5,973 million.

• Board and paper segment delivered strong results, with operating profit at SEK 1,135 million and a SEK 100 million reduction in energy expenses.

• Forest division operating profit reached SEK 487 million, impacted by temporarily lower harvesting but offset by price increases.

• Wood products segment reported operating profit of SEK 23 million, just above break-even, with increased prices but rising log costs and costs from the Iggesund sawmill rebuild.

• Renewable energy posted weak results due to low electricity prices in northern Sweden and partial hydropower outages.

Outlook and guidance

• Significant uncertainty persists in wood products and construction markets due to global log shortages, high sawlog prices, and unclear demand outlook for autumn.

• Board and paper face overcapacity, weak demand, and further uncertainty from potential tariffs and structural decline in paper consumption.

• Major maintenance shutdowns at Workington and Iggesund Mills in Q2 and Q3 are expected to negatively impact earnings by SEK 150–300 million.

• Harvesting in the forest division expected to normalize over the year, with no annual impact from Q1's temporary dip.