DAVY VIEW

Lower prices (in wood, pulp and containerboard) saw Swedish forest owner SCA’s Q1 2024 operating profit fall 33% year-on-year (yoy) to SEK1,077m, a 3.5% consensus miss, principally due to lower-than-expected profit in pulp and containerboard. Positively, prices are rising in pulp, containerboard and wood products in 2024. While some investors remain fearful of forest value write-downs, we remain confident of both cyclical (1) pulp, containerboard and pulp cyclical pricing recovery and (2) SCA’s organic expansion projects in pulp (CTMP), containerboard (Obbola) and renewable energy – supporting SCA 2024/2025 profit growth.