Metsä Group’s comparable operating result in January–June 2017 was EUR 247 million

Metsä Group Half Year Financial Report 2017 3 August 2017 at 12:00 noon EEST

January–June 2017 (1–6/2016)

• Sales were EUR 2,451 million (2,339).
   
• Operating result was EUR 253 million (225). Comparable operating result was EUR 247 million (229).
   
• Result before tax was EUR 237 million (186). Comparable result before tax was EUR 230 million (190).
   
• Comparable return on capital employed was 11.5 per cent (11.0). Comparable return on capital employed excluding assets under construction related to strategic investment projects was 14.0 per cent (12.2).
   
• Cash flow from operations was EUR 190 million (121).

April–June 2017 (4–6/2016)  

• Sales were EUR 1,235 million (1,184).
   
• Operating result was EUR 122 million (119). Comparable operating result was EUR 119 million (120).
   
• Result before tax was EUR 107 million (98). Comparable result before tax was EUR 104 million (100).
   
• Comparable return on capital employed was 10.6 per cent (11.5). Comparable return on capital employed excluding assets under construction related to strategic investment projects was 13.1 per cent (12.6).
   
• Cash flow from operations was EUR 192 million (152).

Events during the second quarter of 2017 

• The market prices of long-fibre and short-fibre pulp increased.
   
• Paperboard deliveries grew by 11 per cent from the previous quarter. The average price of folding boxboard was burdened by Husum mill’s geographical sales mix.

• Metsä Board’s extrusion coating line at the Husum mill in Sweden started up in April.

• Metsä Fibre announced that the start-up of its new bioproduct mill in Äänekoski, Finland, will begin in mid-August. Pulp deliveries will start at the beginning of September. 

• Metsä Tissue announced the rebuild of the baking paper machine at the Düren mill in Germany. The value of the investment is approximately EUR 15 million.

• Metsä Wood announced its intention to build a birch plywood mill in Pärnu, Estonia. The construction work began in April, and the mill will start production in the second half of 2018.
   
• Metsä Forest acquired the wood supply business of Metsäkolmio Oy and Harvestia Oy’s wood supply business in southeast Finland.
   
• Metsä Forest divested its share in its Russian associated company ZAO HK Vologodskie Lesopromyshlennik.
   
• Metsä Fibre’s CEO Ilkka Hämälä, M.Sc. (Eng.), was appointed CEO of Metsäliitto Cooperative as of 1 January 2018. He starts as the President and CEO of Metsä Group on 1 April 2018.  

• Ismo Nousiainen, M.Sc. (Eng.), was appointed Deputy CEO of Metsä Fibre as of 1 August 2017 and CEO as of 1 January 2018. 

Result guidance for July–September 2017 

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

President and CEO Kari Jordan:

“Metsä Group’s profitability in 2017 has improved from the previous year. The most significant reasons for the improved result are the clearly higher volumes in paperboard deliveries and the increased price of pulp.

Metsä Group’s key development projects aiming for profitable growth are progressing according to plan. The construction of the bioproduct mill in Äänekoski, which has proceeded on schedule and on budget, is nearly completed, and the mill’s start-up will begin in mid-August. Pulp deliveries to customers will start at the beginning of September. The new production line at the Kerto^® LVL mill in Lohja will likewise start up in August. The construction of the birch plywood mill in Pärnu, Estonia, and the work of converting the old paper machine hall at Äänekoski into a birch veneer mill are proceeding well. The Husum paperboard mill’s new extrusion coating line started up in April, and the related quality feedback from customers has been good. In June, we began work on rebuilding the baking paper machine at the Düren mill in Germany. The new machine will also allow us to expand our cooking paper business in the future.

After years of stagnation, Finland’s economy has started to pick up. For this growth to continue, our country needs investments. Metsä Group and Finland’s forest industry in general have met this need. According to the National Forest Inventory figures published by the Natural Resources Institute Finland (Luke) in June, the growth of our forests has continued to accelerate. This means that the raw material base is good. Uncertainty with regard to future investments is nevertheless increasing due to the EU’s climate and land use policies. If implemented in its current form, the LULUCF Regulation, which regulates the levels of carbon sinks, would be detrimental to Finland. Combating climate change is of utmost importance, and Metsä Group is committed to it. However, restricting a sector based on sustainable forest management and a renewable natural resource is not the right way to go forward.”

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.

Demand for wood products will remain good, and this will be reflected in the order book level, which will be higher than in the previous year, particularly in Kerto^® LVL products. The outlook for plywood products is likewise positive. Construction in the UK is expected to remain at a good level, but delivery volumes in the third quarter are expected to suffer slight seasonal decline.

Demand for and supply of market pulp in Europe and Asia are in balance, with normal seasonal variation.

Demand for spruce sawn timber is expected to remain good in most markets. Demand for pine sawn timber has improved, and the market balance strengthened.

The 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 July–September are expected to remain roughly at the level of the second quarter.

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

METSÄ GROUP
   

For further information, please contact:
Vesa-Pekka Takala, CFO, Metsä Group, tel. +358 10 465 4260
Juha Laine, SVP, Communications, Metsä Group, tel. +358 10 465 4541

  

Metsä Group will publish its January-September 2017 interim report on 1 November 2017.

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 owned by approximately 104,000 Finnish forest owners.