Sweden's SCA to nearly double valuation of forestry holdings
STOCKHOLM, Oct 30 (Reuters) - Swedish forestry group SCA SCAb.ST said on Wednesday it expected to nearly double the valuation of its forest holdings at the turn of the year after higher deliveries and favourable currency swings lifted third-quarter earnings.
Prices on forestry assets in the Nordic country have risen sharply in recent years and SCA said in statement it planned to move to a valuation method for its holdings based on transaction prices in areas where the company owned forests.
The company said that currently available transaction prices and estimated volumes indicated a market value of its holdings of 63 billion to 67 billion Swedish crowns ($6.49 billion to $6.91 billion), far above the current book value of 34 billion.
"As there is a limited supply of forest land, SCA expects the value of forest as a strategic resource to continue to grow due to the need to shift from finite to renewable resources," the company said in its earnings report.
"SCA will therefore continue to invest in forest land, both to increase growth in existing holdings and to increase the
The company reported a 13 percent rise in third quarter earnings before interest, tax, depreciation and amortisation (EBITDA) to 4.26 billion crowns on the back of higher volumes from its Ostrand pulp mill and a weak Swedish currency.
($1 = 9.7022 Swedish crowns)
(Reporting by Niklas Pollard; editing by Johannes Hellstrom)