Holmen (HOLM) Q2 2024 earnings summary

Executive summary

• Q2 net profit exceeded SEK 980 million, with strong performance in board and paper segments despite challenging market conditions.

• Operating profit for Jan–Jun 2024 was SEK 1,927m, down from SEK 2,875m year-over-year, mainly due to lower paper prices and absence of last year's surplus electricity income.

• Return on capital employed reached 16% for H1 2024, above the 10-year average of 18%.

• Strong financial position maintained after SEK 1.8 billion dividend payout; net debt at 6% of equity (SEK 3.3 billion).

• Board authorized share buyback of up to 3 million shares, representing 2% of shares.

Financial highlights

• Operating profit (excluding items affecting comparability) reached SEK 2,479 million in Q2 2024, up from SEK 2,345 million in Q2 2023.

• Net sales for Jan–Jun 2024 were SEK 11,613m, compared to SEK 11,977m year-over-year.

• Forestry operations cash flow is 60% higher than three years ago, driven by higher wood prices and seasonal harvesting.

• Board and paper division contributed equally to turnover and EBITDA in Q2; higher board volumes and improved product mix offset high log costs.

• SEK 1.8 billion dividend distributed in Q2; net debt at 6% of equity.

Outlook and guidance

• Market for consumer paperboard is recovering, while construction sector activity remains low.

• Board and paper product mix improvement is an ongoing ambition, though subject to market developments.

• Maintenance and investment shutdowns in Q4 expected to impact earnings by SEK -250m.

• For the rest of the year, electricity costs are almost fully hedged, minimizing spot price impact.

• Board and paper division to benefit from seasonally lower costs in Q3 (SEK 70–80 million), while wood products face higher net wood costs.