One of Sweden’s largest forest industry groups has its credit rating lowered by the credit rating agency Standard & Poor’s, which, however, believes in a clearing soon again.

The American credit rating agency Standard & Poor’s (S&P) has lowered the credit rating for the forestry company SCA to BBB- from BBB with reference to seeing “weak market conditions”. It reports the newspaper Affärsvärlden.

S&P estimates that the market situation for SCA will lead to lower revenues and EBITDA for the company during 2020-2021 compared with 2019. It also expects a “strained free operating cash flow for SCA from increased investments”.

However, S&P considers the outlook for SCA to be stable as it considers that the company retains its strong market positions. The closure of printing paper production at the factory in Ortviken, the investment in increased pulp production at the factory in Östrand and a gradual recovery of sales prices are factors that S&P believes will raise SCA’s profitability in the future.

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