Metsä Group’s comparable operating result in January–March 2019 was EUR 180 million

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Metsä Group Interim Report January–March 2019 26 April 2019 at 12:00 noon EEST

January–March 2019 (1–3/2018)

  • Sales were EUR 1,438 million (1,428).

  • Operating result was EUR 183 million (208). Comparable operating result was EUR 180 million (208).

  • Result before tax was EUR 167 million (185). Comparable result before tax was EUR 163 million (185).

  • Comparable return on capital employed was 13.8% (16.6).

  • Cash flow from operations was EUR 41 million (34).

Events during the first quarter of 2019

  • The delivery volumes of market pulp began to grow again after the sudden decline in the previous quarter. The market in China picked up, and prices began to rise. In Europe, prices declined.

  • Demand for folding boxboard was good, but the delivery volumes of white kraftliner continued to decline, especially in Europe.

  • The prices of folding boxboard rose as of the beginning of the year and the prices of white kraftliner remained stable.

  • Metsä Fibre announced a EUR 30 million investment in increasing the capacity of the debarking department at the Joutseno mill.

  • The rest of the production lines at the birch plywood mill built in Pärnu by Metsä Wood were started up during the first quarter.

  • Metsä Wood’s new Kerto® LVL line, with an annual capacity of 65,000 cubic metres, started up for a production test run at the Punkaharju mill.

  • Metsä Group announced that it would pay 70% in advance funding to its owner-members for summer thinning carried out between 8 February and 30 April.

Events after reporting period

Metsä Fibre started pre-engineering projects related to a new bioproduct mill in Kemi, Finland, and a new pine sawmill in Rauma, Finland. Metsä Board commenced a pre-engineering project related to the first phase of the renewal of its pulp mill in Husum, Sweden.

Result guidance for April–June 2019

Metsä Group’s comparable operating result is in the second quarter of 2019 expected to weaken from the first quarter of 2019.

President and CEO Ilkka Hämälä:

“As anticipated, Metsä Group achieved a good result in the first quarter of 2019. Our profit-making ability weakened compared to the excellent last year, mainly due to the decline in the price of pulp in late 2018.

In Asia, the price level of pulp began to rise during the first quarter. In Europe, pulp prices were still in decline, following the price changes in China with a typical market delay. Compared to the strong growth in demand during the corresponding period in the previous year, the caution attributable to uncertainty factors in world trade was visible in the demand situation in all Metsä Group’s business areas.

The long-term growth drivers impacting forest industry and Metsä Group’s products – i.e. the demand for products made from renewable raw materials, the growth of the global economy, and urbanisation – continue to be the trends we focus on when developing our industry. The basis for further development is good. Our future steps will consist of a strong response to the challenge we all face due to climate change.

Metsä Group will increase the carbon sink formed by forests and wood products as Finland’s leading player in forest management services and mechanical wood processing. We will reduce fossil-based emissions by replacing the rest of our fossil fuel and raw material use with renewables by 2030. We are developing new wood fibre based products to replace products of the fossil economy. The operations of our Group as a whole – including the growth of Metsäliitto Cooperative owner-members’ forests – forms a significant carbon sink, which we furthermore aim to increase clearly by 2030.”

Key figures

  2019 2018 2018
Condensed income statement, EUR million 1–3 1–3 1–12
Sales 1 437.7 1 427.8 5 709.1
Other operating income 17.1 10.3 58.1
Operating expenses -1 198.6 -1 147.7 -4 639.5
Depreciation and impairment losses -73.2 -82.5 -284.8
Operating result 183.0 207.9 843.0
Share of results from associated companies and joint ventures -0.4 0.7 7.0
Exchange gains and losses -2.6 -3.5 -6.3
Other net financial items -13.4 -20.6 -74.6
Result before income tax 166.6 184.5 769.1
Income tax -33.9 -38.3 -156.4
Result for the period 132.7 146.3 612.7


  2019 2018 2018
Profitability 1–3 1–3 1–12
Operating result, EUR million 183.0 207.9 843.0
Comparable operating result 179.7 207.9 848.5
% of sales 12.5 14.6 14.9
Return on capital employed, % 14.1 16.6 16.6
Comparable return on capital employed 13.8 16.6 16.8
Return on equity, % 14.5 19.4 18.5
Comparable return on equity 14.1 19.4 18.7


  2019 2018 2018
Financial position 31.3. 31.3. 31.12.
Equity ratio, % 53.3 46.5 53.1
Net gearing ratio, % 18 34 13
Interest-bearing net liabilities, EUR million 646 1 039 463


Sales and Operating result1–3/2019, EUR million Wood Supply and Forest Services Wood Products Industry Pulp andSawn TimberIndustry Paperboard Industry Tissue and Greaseproof Papers
Sales 525.8 111.3 622.8 487.1 267.3
  Other operating income 5.3 1.7 2.2 19.9 1.4
  Operating expenses -517.8 -107.0 -477.3 -407.6 -247.1
  Depreciation and impairment losses -2.1 -4.2 -25.2 -27.5 -11.2
Operating result 11.3 1.8 122.4 71.9 10.5
Items affecting comparability - - - -10.0 -
Comparable operating result 11.3 1.8 122.4 61.8 10.5
% of sales 2.1 1.7 19.7 12.7 3.9

Near-term outlook

Wood demand will focus on thinning sites to be harvested when the ground is unfrozen and, in terms of energy wood, on crown wood. Demand for forest management services is expected to remain good.

In veneer products, the demand for Kerto LVL and spruce plywood is expected to remain stable during the second quarter of the year. The uncertainty in the demand outlook for birch plywood and the tough price competition in the distributor market are expected to continue.

Seasonality in the UK’s timber product market will increase delivery volumes in the second quarter, but the uncertainty attributable to Brexit will continue to reflect on the demand outlook, particularly in the distributor segment.

The demand for pulp is expected to remain at the current level during the next quarter. In the pulp markets, demand and supply are expected to achieve a balance due to the maintenance shutdowns set to take place during the second quarter of the year. At the same time, producers’ inventory levels are expected to decrease.

The demand for sawn timber is expected to remain at the current level in the main markets.

Metsä Board’s paperboard deliveries in the second quarter of the year are expected to remain approximately at the same level as in the first quarter.

The prices of folding boxboard in local currencies are expected to remain stable. Metsä Board continues its measures to improve the average price of folding boxboard by optimising the sales mix. The weakened demand may have a negative impact on the average price of liner sales.

Demand in the tissue and greaseproof paper markets is expected to remain stable in all market areas. Profitability will continue to be burdened by the high prices of raw materials. The measures aiming to raise end-product prices will be continued.


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



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.

In 2018, Metsä Group’s sales totalled EUR 5.7 billion, and it employs approximately 9,300 people. Metsäliitto Cooperative is the parent company of Metsä Group and is owned by approximately 103,000 Finnish forest owners.

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