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Investing.com -- Shares of Holmen (STOCKHOLM:HOLMb) climbed 4% today following the company’s announcement of a stronger-than-expected first-quarter earnings report.
The Swedish forest products company reported a first-quarter EBIT of SEK 988 million, a 15% increase compared to SEK 856 million according to Infront consensus. The positive earnings were primarily driven by the performance of its board and paper division, which saw EBIT of SEK 528 million versus the SEK 366 million consensus, benefiting from robust deliveries and lower energy costs in Sweden.
The wood products division also exceeded modest expectations, posting an EBIT of SEK 1 million compared to an anticipated SEK 21 million loss. The valuation of the company’s forest assets remained stable at SEK 58 billion, in line with forecasts, which translates to SEK 366 per share, excluding liquidity discount.
Highlighting its strong balance sheet with a net debt to EBITDA ratio of 0.7x, Holmen emphasized its continued commitment to disciplined capital return strategies, including dividends and share buybacks.
Analysts at Jefferies commented on the results, noting that "HOLMB is not a pulp play, and shares have held up well in USD terms YTD vs P&P peers. As a forest owner HOLMB is more stable but may relatively underperform cyclical P&P peers in a recovery scenario or if Sweden energy advantage vs continental Europe declines, reducing its cost advantages in paper division.
We expect shares higher on 1Q beat today, but we continue to see FX (stronger SEK) and macro uncertainty driving downward pressure to 2025 cons EBIT of SEK3.8bn (JEFe:SEK3.97bn)."
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