Holmen (HOLM) Q2 2024 earnings summary

Executive summary

• Q2 profit exceeded SEK 980 million, with strong board and paper performance despite challenging market conditions and rising wood prices.

• Return on capital employed reached 16% for H1 2024, compared to a 10-year average of 18%.

• 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.

• The Board initiated a share repurchase program for up to 3 million shares, reflecting a robust balance sheet.

Financial highlights

• Net debt stands at SEK 3.3 billion, representing 6% of equity, after paying SEK 1.8 billion in dividends in Q2.

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

• EBITDA for Jan–Jun was SEK 2,619m (3,550), and operating margin was 17% (24%).

• Cash flow from operating activities before working capital changes was SEK 2,136m (3,588).

• SEK 1,831m in dividends paid in Q2.

Outlook and guidance

• Board and paper product mix improvements are targeted to be maintained, though dependent on market developments.

• Wood prices are expected to continue rising into Q3, supporting higher sales prices.

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

• Renewable energy segment expects continued low prices and production in the near term.

• For the rest of the year, electricity costs are expected to remain stable due to near-full hedging.