Our response to Svenska Cellulosa AB SCA (SFB: SCA.B)

Svenska Cellulosa published its interim report for the fourth quarter of 2023, and what caught everyone’s eye was that despite alleged billions in profits, cash on hand has fallen. However, SCA’s reported net debt ratio only increased by 0.2 times as the company maintained its absurd and opaque method of calculating net debt. Fortunately for SCA, the company’s pension surplus increased by SEK 530m in 2023, offsetting the decrease in cash on hand. In our opinion, SCA’s net debt is misstated by not including hidden debt of several billion and by subtracting non-current assets from its gross debt.

Management rejected our findings in SCA’s earnings call, but the facts are indisputable. The math doesn’t add up.

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