The third quarter of 2024 brought mixed results for Northern European forestry giants, as companies managed varied performances across segments like pulp, timber, and renewable energy. Rising timber costs and a weaker global construction market played significant roles in shaping the quarterly outcomes, while some firms benefitted from robust demand for pulp and efficient cost control.<\/p>\n
SCA reports impressive gains in revenue and profit<\/strong><\/p>\n SCA achieved notable growth in Q3, with a 22% rise in sales, totaling SEK 5.2 billion. The company\u2019s EBITDA surged by 42% to reach SEK 2 billion, resulting in an impressive EBITDA margin of 38%. Strong results in wood and pulp sales, up by 23% and 27% respectively, underscored SCA\u2019s quarterly success, though challenges in renewable energy led to a 36% dip in EBITDA for that segment. Despite increased maintenance costs, SCA posted a net profit of SEK 1.1 billion, supported by higher prices and volumes in key areas. Moving forward, management foresees stable pricing but anticipates some seasonal volume declines.<\/p>\n S\u00f6dra\u2019s pulp success offsets challenges in timber<\/strong><\/p>\n S\u00f6dra posted a strong quarter as well, with net sales increasing by 6% to SEK 6.9 billion and operating profit doubling to SEK 0.9 billion. High pulp prices and effective cost control were instrumental in S\u00f6dra\u2019s profitability, even as raw material costs remained high. The pulp segment was the standout, while timber-related divisions reported minor losses. CEO Lotta Lyr\u00e5 highlighted both the strong performance in pulp and the steady pricing for timber, which has been maintained due to lower supply in the market. However, Q4 is expected to bring increased costs and reduced output due to planned maintenance at S\u00f6dra\u2019s M\u00f6nster\u00e5s mill.<\/p>\n Mets\u00e4 Group faces declining demand and high costs<\/strong><\/p>\n Mets\u00e4 Group faced a weaker quarter, with revenue declining to EUR 1.34 billion from EUR 1.51 billion year-on-year, though comparable operating profit increased to EUR 113 million from EUR 51 million. The result benefitted from an insurance claim related to a gas explosion at the Kemi bioproduct mill. However, Mets\u00e4 struggled with high costs and soft demand, particularly in the pulp sector, where Chinese market slowdown has contributed to a price imbalance. To manage the challenges, Mets\u00e4 has scaled back pulp production, with some mills temporarily halted. The sawmill sector continued to underperform, and the company anticipates further downtime in Q4.<\/p>\n Mets\u00e4 also announced a phased reduction in birch plywood production at its Suolahti mill, with full closure expected by 2026. CEO Ilkka H\u00e4m\u00e4l\u00e4 suggested that while supply from Russia is blocked now, there may be future opportunities as markets evolve. The company expects Q4 results to be weaker, with limited improvement in construction-related demand.<\/p>\n Stora Enso rebounds with improved profit margins<\/strong><\/p>\n Stora Enso reported positive Q3 performance with a 6% increase in sales to EUR 2.3 billion. Adjusted operating profit rose sharply to EUR 175 million from EUR 21 million in Q3 2023. Improved profitability in packaging materials and pulp contributed to the result, though the company faced headwinds from falling hardwood pulp prices, especially in China. Stora Enso\u2019s cost-reduction program is on track to reach full impact by 2025, aiming to reduce fixed costs by EUR 120 million. The company also announced plans to divest 12% of its forest holdings in Sweden, a move intended to strengthen its balance sheet.<\/p>\n UPM\u2019s EBIT climbs on mixed market conditions<\/strong><\/p>\n UPM-Kymmene posted a robust 32% increase in comparable EBIT for Q3, reaching EUR 291 million, despite a slight dip in sales to EUR 2.52 billion. This increase came amid a challenging environment where demand across UPM\u2019s product lines did not recover as expected. The company noted strong performance in renewable fibers, supported by full production at its Paso de los Toros pulp mill in Uruguay, though high wood costs in Finland restrained pulp production. UPM\u2019s advanced materials division faced slowdowns, and its energy segment saw reduced earnings due to low electricity prices.<\/p>\n CEO Massimo Reynaudo projected a stable outlook for the remainder of 2024, with Q4 comparable EBIT expected to match or exceed previous levels, despite lingering challenges in demand. UPM remains focused on cost optimization as it navigates the complex economic climate, adjusting its production and efficiency strategies to maintain profitability.<\/p>","protected":false},"excerpt":{"rendered":" The third quarter of 2024 brought mixed results for Northern European forestry giants, as companies managed varied performances across segments like pulp, timber, and renewable energy. Rising timber costs and a weaker global construction market played significant roles in shaping … Continue reading