Svenska Cellulosa Aktiebolaget’s (OMX: SCA B) fourth quarter sales were down by about 1% to 26.749 billion SEK but corrected for exchange rate effects and divestments they were somewhat higher. Operating profit excluding special items was 2.5 billion but large one-off items, particularly a 4.6 billion goodwill impairment pushed profit for the period down to minus 3.4 billion.
Recently announced major transactions currently under review, a binding offer for Georgia-Pacific’s European tissue operations and the divestment of SCA packaging, are still the biggest story concerning the company. The company foresees major synergies, lower sensitivity to economic swings and gradually higher earnings in the future. Efficiency improvement measures and new product launches coupled with growth into new markets is estimated to help towards that end.
Both Personal Care and Tissue showed nice growth in Q4 although the yearly performance was less spectacular. Packaging and Forest Products didn’t fare so well in the last quarter. Incontinence care products demand in the emerging markets is favourable and same is true for Tissue segment. SCA’s board proposes a 5% dividend hike. The stock is up 3%, which is slightly more than the index.
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