Stora Enso’s wood products division posts record Q1 results28 April 2022
International forest product manufacturer Stora Enso has posted record Q1 earnings in its wood products division thanks to significantly higher prices than a year ago.
Stora Enso’s Interim Report covering January–March 2022 was an “outstanding performance in a turbulent environment”, the company declared.
The wood products division posted a sales increase of 50% to €573m thanks to higher prices and deliveries supported by solid demand. Sales in the corresponding period a year ago were €382m.
Operational EBIT grew by €66m to €118m, with the high profitability more than offsetting increases in raw material and logistics costs.
Wood product deliveries were up to 1.178 million m3 (Q1, 2021: 1.113 million m3).
Prices were described as significantly higher than a year ago and “stable” compared to Q4, 2021.
Group-wide Stora Enso’s sales grew 23% to €2.79bn (Q1, 2021, €2.27bn). Operational EBIT increased by 53% to €503m (Q1, 2021: €328m).
Other key highlights from Q1 include all import and export activities from and to Russia being halted and wood supply in Russia has stopped. Mitigation and re-routing are in place to manage supply and risk.
In April, Stora Enso announced that it is divesting its two sawmills in Russia to local management of the sites, including its Russian forest operation which through its harvesting, supplies wood to the sawmills. Sales in Russia represented approximately 3% of total Group revenues in 2021.
“The general macroeconomic environment and the pandemic are persisting uncertainties,” the company said.
“However, with Russia's invasion of Ukraine risks have increased across the world. Sustained commercial momentum is supported by the market demand for Stora Enso’s products across all divisions. To manage volatility, measures such as pricing, flexibility in sourcing and logistics, as well as hedging are in place.”
The company said its direct and indirect forest ownership in Sweden and Finland have enabled wood sourcing alternatives to compensate for ceased Russian volumes.