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SCA – Data Mining Rebuttal

Author: Published on: Published in: Svenska Cellulosa STO:SCA-B

February 15, 2024 – On February 7, 2024, SCA responded to our report with data mined statistics which serve to satisfy management’s valuation and harvesting delusions. This response can be found here:

https://www.sca.com/en/media/news/2024/clarification-regarding-questions-relating-to-the-valuation-of-forest-assets-harvesting-forest-damage-and-accounting-related-matters/

As usual: the majority of the sell side lapped up this response without taking a moment to verify any of managements claims. We will once again do our “high-school homework” for all of the analysts who haven’t done it themselves.

  • SCA ‘s contention that their 2 million hectares of productive forest land are equivalent to private individual owned forest land is absurd and the company makes no attempt to substantiate this delusion.
  • SCA’s lackluster rebuttal is a tacit admission that the value of its forest assets is materially overstated. Ludvig & Co’s recently presented numbers show that SCA’s forest asset value is overstated by SEK24b.
  • In what is either a staggering coincidence or a colossal management oversight, this discrepancy is almost entirely eliminated when adding SCA’s ~600,000ha of unproductive forest land to the same calculation.
  • SCA provides unaudited data for a timeframe that does not align with its valuation methodologies, counties that do not align fully with its forest holdings, and in units that do not correspond with those stated in its annual reports.

More to come.

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