Metsä Group’s comparable operating result in January–March 2018 was EUR 208 million

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Metsä Group Interim Report January–March 2018 3 May 2018 at 12:00 noon EEST

January–March 2018 (1–3/2017)

  • Sales were EUR 1,428 million (1–3/2017: EUR 1,216 million).
  • Operating result was EUR 208 million (131). Comparable operating result was EUR 208 million (128).
  • Result before tax was EUR 185 million (130). Comparable result before tax was EUR 185 million (126).
  • Comparable return on capital employed was 16.6% (12.5).
  • Cash flow from operations was EUR 34 million (-1).

Events during the first quarter of 2018

  • The market prices of long-fibre and short-fibre pulp continued to increase.
  • The market prices of folding boxboard and white kraftliner rose. The improved sales prices compensated for the unfavourable exchange rate changes in full.
  • Metsä Group announced it would pay double bonuses on pulpwood from owner-members between 1 March and 31 May 2018.
  • Standard & Poor’s Ratings Services raised Metsä Board’s credit rating to investment grade.
  • Ilkka Hämälä started as the President and CEO of Metsä Group on 1 April 2018.

Result guidance for April–June 2018

Metsä Group’s comparable operating result in the second quarter of 2018 is expected to be roughly at the same level as in the first quarter of 2018.

Events after the review period

Metsä Board agreed on changes in its syndicated credit agreement maturing in 2020. The agreement has previously consisted of a EUR 150 million term loan and an undrawn revolving credit facility of EUR 100 million. 

In April 2018, the company repaid EUR 100 million of its existing loan and simultaneously increased the size of its credit facility by EUR 50 million. After the change, the syndicated credit agreement consists of a EUR 50 million term loan and an undrawn revolving credit facility of EUR 150 million.

President and CEO Ilkka Hämälä:

“Metsä Group’s profit-making ability improved considerably during the first quarter of 2018 compared to the corresponding period in the previous year. The biggest factors behind the improved result were the positive development in pulp prices and the improved performance of the paperboard business. Production at the Äänekoski bioproduct mill has developed in line with the planned start-up curve. The capacity utilisation rate of Husum’s folding boxboard machine has also risen close to the target.  

The investment programme of the Wood Products Industry has progressed to the normal production phase at Lohja Kerto mill. The start-up of equipment at the veneer mill in Äänekoski and at the birch plywood mill under construction in Pärnu has begun as planned. The construction work for the new Kerto production line at Punkaharju mill, for which the investment decision was made at the end of 2017, has begun.

Our Tissue and Cooking Paper Industry has several ongoing investments in processing lines aiming to improve the product portfolio and internal efficiency. The investment in increasing capacity for cooking papers at the Düren mill is progressing towards start-up in the third quarter, according to schedule.  

Global economic growth is supporting demand for our products in all our business areas. The economic growth has been accompanied by cost inflation. Improving the cost-effectiveness of the Group, as well as Finland’s national competitiveness, is crucially important for our future success. It is particularly important to remember this during the current positive economic cycle.”

Key figures

  2018 2017 2017
Condensed income statement, EUR million 1–3 1–3 1–12
Sales 1 427.8 1 216.1 5 040.0
Other operating income 10.3 14.0 60.3
Operating expenses -1 147.7 -1 036.3 -4 269.7
Depreciation and impairment losses -82.5 -62.7 -249.7
Operating result 207.9 131.2 581.0
Share of results from associated companies andjoint ventures


Exchange gains and losses -3.5 1.4 -3.3
Other net financial items -20.6 -17.1 -88.5
Result before income tax 184.5 129.5 506.2
Income tax -38.3 -22.9 -102.3
Result for the period 146.3 106.7 403.9
  2018 2017 2017
Profitability 1–3 1–3 1–12
Operating result, EUR million 207.9 131.2 581.0
Comparable operating result 207.9 127.9 566.1
% of sales 14.6 10.5 11.2
Return on capital employed, % 16.6 12.8 12.6
Comparable return on capital employed 16.6 12.5 12.3
Return on equity, % 19.4 16.3 14.5
Comparable return on equity 19.4 15.7 14.0
  2018 2017 2017
Financial position 31.3. 31.3. 31.12.
Equity ratio, % 46.5 44.1 45.0
Net gearing ratio, % 34 46 34
Interest-bearing net liabilities, EUR million 1 039 1 226 993


Near-term outlook

Demand for wood will focus on regeneration and thinning felling that can be harvested in the summer and, in energy wood, primarily on crown wood. The sales of forest management services are expected to remain good.

General market demand for wood products is expected to remain strong, which improves order book levels compared to previous years, particularly in plywood products. The strong construction market supports demand for Kerto® LVL products. Uncertainty in the UK market is expected to continue, particularly in terms of distributor customers.

The pulp market is expected to remain at its current, good level. Demand for sawn timber is also expected to remain good in all main markets.

Demand for high-quality consumer packaging paperboard made from fresh fibre is expected to continue to grow. Metsä Board’s paperboard deliveries in April–June are expected to grow slightly from the previous quarter. The market prices of folding boxboard and white kraftliner in local currencies are expected to remain stable or to rise slightly.

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

The Board of Directors' proposal for distribution of the profit 

Metsäliitto Cooperative’s Board of Directors proposes to the Representative Council on 3 May 2018 that interest of 7.0% (6.0% in 2016) be distributed on the participation shares of the members for 2017. Interest of 6.5% (5.5) is proposed for additional shares A, and interest of 2.5% (2.5) for additional shares B.

The Board of Directors has furthermore proposed that EUR 250 million of retained earnings be transferred to the reserve for invested unrestricted equity.


Espoo, Finland, 3 May 2018


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

Link to Metsä Group's interim report January-March 2018 (pdf)

Metsä Group

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 5.0 billion in 2017, and it employs approximately 9,100 people. The Group operates in nearly 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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