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Finnish forestry giant Stora Enso posted its best annual results in more than 20 years although profit declined in the fourth-quarter with the company warning that margins are likely to be squeezed by increasing costs this year.<\/p>\n
\"Stora Enso enters the new year with market softness and variable cost pressures which are expected to be more challenging in 2023 than in 2022 weighing on our results this year,\" the company said in a statement.<\/p>\n
Despite a 5% increase in sales, operational earnings before interest and tax (EBIT) in the fourth quarter decreased 17% to 355 million euros ($385 million) from a year earlier, missing the 403 million euros expected by analysts in a company-provided poll.<\/p>\n
Chief Executive Annica Bresky, however, hailed another \"historically high\" annual operational EBIT, which came in at 1.89 billion euros for 2022, a year-on-year increase of 24% and the highest since 2000.<\/p>\n
Stora Enso remains vigilant against persisting market disruptions and uncertainties, macroeconomic environment and inflationary pressures. Stora Enso enters the new year with market softness and variable cost pressures which are expected to be more challenging in 2023 than in 2022 weighing on our results this year. The high macroeconomic uncertainty and continued weak consumer confidence resulting in lower private consumption will continue to impact negatively, especially on containerboard demand. Lower demand in the construction sector remains challenging and is expected to especially impact on the demand for traditional sawn wood. Compared to 2022, Group margins are expected to be squeezed by increasing costs, particularly in relation to energy, wood, chemicals and logistics.<\/p>\n
To manage volatility, variable costs are continually reviewed, and preparatory actions are taken to be prepared to respond to fluctuations in demand with reinforced cost control. Other measures such as pricing, flexibility in product mix, capacity and inventory management, and sourcing and logistics are in place. Stora Enso in Finland has completed negotiations on potential furloughs at its Wood Products division, and this year started negotiations on potential furloughs at its Packaging Materials division\u2019s production sites. Activities on adjusting capacity to respond to fluctuations in demand have also been put in place for the Wood Products division\u2019s sites in other countries. Stora Enso also benefits from its high self-sufficiency in energy of 72% as well as hedging, and from its ~30% self-sufficiency of wood.<\/p>\n
The whole construction market has been heavily impacted by high inflation and supply chain constraints which impacted the performance of Stora Enso's Wood Products division. Demand for traditional sawn products in the company's European markets eased in the second half of the year and was followed by its overseas markets showing a similar and accelerated trend in the last quarter of the year. The weakness in this division was further evident in the lower demand for building permits and initiation of fewer building projects and the resulting impact of this rapid market-related slow-down, led to a quarterly loss.<\/p>","protected":false},"excerpt":{"rendered":"
Finnish forestry giant Stora Enso posted its best annual results in more than 20 years although profit declined in the fourth-quarter with the company warning that margins are likely to be squeezed by increasing costs this year. “Stora Enso enters … Continue reading