Metsä Group’s comparable operating result in January–September 2017 was EUR 381 million

Metsä Group Interim Report January–September 2017 1 November 2017 at 12:00 noon EET

January–September 2017 (1–9/2016)

• Sales were EUR 3,712 million (3,483).
   
• Operating result was EUR 397 million (333). Comparable operating result was EUR 381 million (332). 
   
• Result before tax was EUR 345 million (275). Comparable result before tax was EUR 330 million (275).
   
• Comparable return on capital employed was 11.2 per cent (10.5). Comparable return on capital employed excluding investments related to the bioproduct mill was 14.0 per cent (11.9).
   
• Cash flow from operations was EUR 611 million (298).

July–September 2017 (7–9/2016)

• Sales were EUR 1,260 million (1,143). 
   
• Operating result was EUR 143 million (107). Comparable operating result was EUR 134 million (103).
   
• Result before tax was EUR 109 million (89). Comparable result before tax was EUR 100 million (85).
   
• Comparable return on capital employed was 10.8 per cent (9.8). Comparable return on capital employed excluding investments related to the bioproduct mill was 13.7 per cent (11.1).
   
• Cash flow from operations was EUR 420 million (177). 
   

Events during the third quarter of 2017

• Metsä Fibre’s bioproduct mill in Äänekoski, Finland, started up according to the schedule in August.
   
• The currency-denominated market price of long-fibre pulp and the market price of short-fibre pulp increased by 4 per cent and 12 per cent, respectively, compared to the previous quarter.
   
• Demand for paperboards was at a good level.
   
• Metsä Forest began harvesting for the purposes of the bioproduct mill’s production. The purchasing of wood had already begun in 2016.
   
• Metsä Wood’s new Kerto® LVL line in Lohja, Finland, started up. 
   
• The foundation stone of Metsä Wood’s new birch plywood mill was laid in Pärnu, Estonia.
   
• Metsä Wood announced its plan to construct a new Kerto® LVL line at its Punkaharju mill in Finland.
   
• Metsä Board issued an unsecured bond of EUR 250 million.
   
• Moody’s Investors Service upgraded Metsä Board’s credit rating from Ba2 to Ba1.
   

Result guidance for October–December 2017

Metsä Group’s comparable operating result in the fourth quarter of 2017 is expected to be to be roughly at the same level as in the third quarter of 2017.
 

President and CEO Kari Jordan:

“Metsä Group’s profitability during the first three quarters in 2017 was better than in the previous year. In particular, the result improved  by higher paperboard delivery volumes and rises in pulp prices.

We started the construction of the Äänekoski bioproduct mill in April 2015, and the mill started up in mid-August 2017 – exactly on schedule and within budget. We have shown that major projects can be implemented in Finland competitively and in line with the highest quality standards. The project was made possible by careful planning and highly committed employees, as well as open, constructive cooperation between the project parties. Since the start-up, the mill’s production has increased in line with the planned start-up curve.

The investment programme of the Wood Products Industry is also progressing according to plan. In August, we started up the new Kerto® LVL line at Lohja and laid the foundation stone of the new birch plywood mill under construction in Pärnu, Estonia. At the moment, we are converting the old paper machine hall in Äänekoski into a birch veneer mill. As a result of the strong demand for Kerto® LVL, we are also planning to expand production at the Punkaharju mill. The final investment decision will be made by the end of the year.

The global economic outlook is positive. We will continue to increase sales in our main markets. Finland’s increasingly better-growing forests act as significant carbon sinks. Following a vote of the Council of Europe in October on the LULUCF Regulation, our country may in the future incur notional emissions for the increasingly efficient use of our forest assets. Finland must continue its efforts to influence decisions to achieve a better outcome.”

 

METSÄ GROUP

Key Figures 

SEGMENTS

Near-term outlook

Wood demand will focus on felling sites to be harvested when the ground is unfrozen and, in terms of energy wood, on crown wood. Poor harvesting and transportation conditions may impede wood deliveries, particularly in southern Finland.

The demand for wood products will remain good, which will be reflected in order book levels higher than last year in both Kerto® LVL products, and birch and spruce plywood products. In terms of the UK, the outlook contains uncertainty. Due to seasonality and the effects of Brexit, the delivery volumes in the fourth quarter of the year are expected to decline. 

The pulp markets are expected to remain at the current good level, also in the fourth quarter of the year. The demand for spruce sawn timber will remain good in all main market areas, and inventory levels are expected to decline. The demand for and market balance of pine sawn timber are likewise expected to remain good.

Growth in the demand for high-quality consumer packaging paperboard made from fresh fibre is expected to continue in market areas important for Metsä Board. Delivery volumes in October–December are expected to decline slightly in comparison to the previous quarter, due to the seasonal decline in December.

In the tissue and cooking paper markets, demand is expected to remain stable in all market areas. Demand for tissue paper will increase, particularly in Eastern Central Europe, and demand for cooking papers in Asia.

METSÄ GROUP

For further information, please contact:
Vesa-Pekka Takala, CFO, Metsä Group, and Deputy Managing Director of Metsäliitto Cooperative, tel. +358 10 465 4260
Juha Laine, SVP, Communications, Metsä Group, tel. +358 10 465 4541
 

Metsä Group will publish its financial reports in 2018 as follows:

8 February 2018: Financial statements for 2017
3 May 2018: Interim report for January–March 2018
2 August 2018: Half Year Report for 2018
8 November 2018: Interim report for January–September 2018

Metsä Group
www.metsagroup.com

Metsä Group is a forerunner in sustainable bioeconomy utilising renewable wood from sustainably managed northern forests. Metsä Group focuses on wood supply and forest services, wood products, pulp, fresh fibre paperboards and tissue and cooking papers.

Metsä Group’s sales totalled EUR 4.7 billion in 2016, and it employs approximately 9,300 people. The Group operates in some 30 countries. Metsäliitto Cooperative is the parent company of Metsä Group and is owned by approximately 104,000 Finnish forest owners.

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