Stora Enso reported 0.1% increase of sales in 2Q2017. The sales increased to EUR 2,528 million (EUR 2,526 million a year ago). The company’s operational EBITDA in the period accounted for EUR 341 million, generating 13.5% margin. Operational ROCE totaled 10.3% (same as the last year), operational ROCE excluding the Beihai investment 12.4% (12.5%).
Karl-Henrik Sundström, Stora Enso’s CEO, commented:
“Our transformation towards a renewable materials growth company accelerates, and I am confident in our progress. Sales increased marginally, and excluding the paper business sales increased 7.1%. This is primarily due to the ramp-up of strategic investments – the Beihai, Murów and Varkaus mills – and higher pulp and containerboard prices.
Operational EBIT decreased from EUR 226 million to EUR 219 million. This is mainly related to extensive maintenance and a change of maintenance calendar compared to last year, amounting to EUR 15 million. The balance sheet continued to strengthen further, net debt to operational EBITDA has gone from 3.2 to 2.0 during the last four years.
The positive contribution from the transformation projects continues. I am very pleased that we continue to be ahead of plan with the ramp-up of Beihai Mill. We expect the consumer board machine to reach operational EBITDA break-even in the fourth quarter 2017, which is one quarter earlier than previously forecast. We have also made good progress in the ramp-up of the Varkaus kraftliner mill. This quarter, we reached a positive operational EBIT.
During the period, Paper Machine 8 at Kvarnsveden Mill in Sweden was permanently shut down. Our restructuring plan for Kvarnsveden Mill is anticipated to result in annual cost savings of EUR 12 million.
In July, we announced exciting news: we will invest EUR 45 million in a new cross-laminated timber production unit at Gruvön sawmill in Sweden. This investment supports our strategy to grow in the construction industry and increase the use of wood as a building material. We are investing to meet growing customer demand globally, and expect this investment to generate annual sales of approximately EUR 50 million when run at full capacity. Over time, this investment will significantly enable the Wood Products division to exceed its profitability target.
Today, we announce that we have signed an agreement to divest our 35% holding in the minority investment Bulleh Shah Packaging Ltd. to the main owner Packages Ltd. Due to the changing business environment in Pakistan, the Bulleh Shah Packaging asset with its product mix and related future outlook is a non-strategic fit in our consumer board roadmap. Our focus is on high quality virgin-fibre products. We are committed to making a responsible divestment and intend to leave a positive contribution to the society.
As always, I would like to thank our customers for their business, our employees for their dedication, and our investors for their trust.”
In 1Q2017 Stora Enso 2.1% increase of sales
Earlier Stora Enso sold 35% holding in Bulleh Shah Packaging in Pakistan to Packages Ltd.
About Stora Enso:
The company is the global company operating in segments of the paper, biomaterials, wood products and packaging industry. The company has annual production capacity of 5.4 million tonnes of chemical pulp, 11.7 million tonnes of paper and board, 1.3 billion square metres of corrugated packaging and 5.6 million cubic metres of sawn wood products, including 2.9 million cubic metres of value-added products. Its sales in 2015 totaled EUR 10 billion.The Group has some 26 000 employees in more than 35 countries worldwide. It is a publicly traded company listed in Helsinki and Stockholm.