Stora Enso sees 7% dip in 2022 Wood Products division sales2 February 2023
Stora Enso’s Wood Products division saw a 7% sales decrease in the full year 2022, the company said in latest financial results statement.
Sales dipped by €39m to €471m, mainly impacted by lower sales prices, especially for sawn wood.
Operational EBIT decreased by €103m to €-14m, affected by lower prices and volumes, and increased costs mainly for logistics, electricity and raw materials.
Sales and profits were impacted by both the rapid market decline in sawn wood from historically high levels and the exit from the Russian operations
The construction market was heavily impacted by the macro environment, resulting in fewer building permits and projects. But there is stable demand in the less cyclical Building Solutions segment, one of Stora Enso's key growth areas.
Wood product deliveries were 4,235,000m3 in 2022, down 6% on 2021.
Demand and prices in Q4, 2022 were described as significantly lower/weaker than in Q4, 2021.
Group-wide Stora Enso recorded annual sales of €11.68bn (2021: €10.16bn) in 2022, while operational EBIT was €1.89bn (2021: €1.52bn).
The paper division was discontinued as of January 1, 2023, and the divestments of the Hylte and Maxau paper sites are expected to be completed in H1/2023.
“Stora Enso enters the new year with market softness and variable cost pressures which are expected to be more challenging in 2023 than in 2022 weighing on our results this year,” the company said.
“Lower demand in the construction sector remains challenging and is expected to especially impact on the demand for traditional sawn wood. Compared to 2022, Group margins are expected to be squeezed by increasing costs, particularly in relation to energy, wood, chemicals and logistics.”
The group said it would maintain a close focus on cost control.
Stora Enso in Finland has completed negotiations on potential furloughs at its Wood Products division, and this year started negotiations on potential furloughs at its Packaging Materials division’s production sites.
Activities on adjusting capacity to respond to fluctuations in demand have also been put in place for the Wood Products division’s sites in other countries.
Stora Enso's full-year 2023 operational EBIT is expected to be lower than for the full-year 2022
“We see that 2023 will be a weaker year than in 2022,” said Stora Enso’s President and CEO Annica Bresky.