Stora Enso records lower Q1 wood product sales

The division reported sales of €338m, (2019 Q1: €419m) while operational EBITDA was €30m (2019 Q1: €40m).

The lower sales were mainly due to lower classic sawn prices and lower deliveries negatively impacted by the Finnish union strike as well as shift reductions in Central Europe due to Covid-19. The transfer of Uimaharju sawmill to the biomaterials division reduced sales by €12m.

Lower classic sawn sales prices and lower volumes were only partly offset by lower wood and fixed costs. During the quarter Stora Enso completed the divestment of its Pfarrkirchen sawn construction timber (KVH) mill in Germany.

Group-wide Stora Enso says it has built a strong liquidity position amounting to €1.4bn and it has actions in place to enhance its cash flow going forward by active working capital management and cost savings.

“Naturally, it is fair to say that there are currently high macroeconomic uncertainties and low visibility relating to demand development,” said Stora Enso’s president and CEO Annica Bresky.

“So far, our Paper and Wood Products divisions have been affected the most, while there is less impact in our packaging divisions.”

Ms Bresky said Q1 had also been marked by challenging harvesting conditions and strikes in Finland, with lower prices and volumes during the quarter having a negative impact on sales and operational EBIT, compared to the “record levels in the first quarter of last year”.

“Under these conditions, “a new normal” where historical references are no longer valid, I am satisfied with our performance for the quarter. We delivered a result of €180m [group operational EBIT], in the upper end of our guidance range,” she said.

Stora Enso said the role and purpose of packaging - ensuring hygienic conditions and protecting food and pharmaceuticals during transportation and on the store shelves - is now as important as ever. “This is among the areas where we have a solid offering,” it added.

Due to the Covid-19 pandemic and its impact on trading conditions, Stora Enso’s Board of Directors (BOD) has decided to change its dividend proposal to €0.15 per share

The company has also reported that it had been selected as the provider of wooden materials for 491 building projects around the world, using 41,000m3 cross laminated timber (CLT) and 500m3 of laminated veneer lumber (LVL).