Stora Enso hails ‘remarkable improvement’ in profits
The Finnish paper and board maker said the €116 million increase in operating profits compared to the previous year had been driven by volume recovery, active cost management and an increase in the pulp price. The firm also reported a net profit of €102m compared to a €36.1m loss in the same period in 2009. Its Q1 2010 sales of €2.3bn represented a year-on-year increase of more than €160m but a drop of €130m compared to Q4 2009.
Company CEO Jouko Karvinen (pictured right) said its operating profit remained unacceptable but hailed the turnaround in Stora Enso’s performance over the year, particularly in light of a strike in Finland that has cost the firm millions of Euros.
Price prioritised over volume
“Our first quarter results... are further proof of the effectiveness of our early focus on things we can control,” he added. “At €119m, the operating profit excluding fair valuations and non-recurring items is still not acceptable, but it is a remarkable improvement from almost zero a year ago, especially as it includes a loss of approximately €12 million due to the Finnish stevedores' strike.”
He said that the Packaging Business Area continued to perform strongly but that the situation for paper products was mixed. Stora Enso added that price increases were expected in fine paper and gradually in consumer board, where the major part of the business is based on longer-term contracts. The upward price trend would also continue in industrial packaging and wood products.
“Stora Enso will prioritise pricing quality over volume, and manage capacity, costs and cash flow,” he said.
Near-term prospects were improved on a year ago for fine paper, consumer board and industrial packaging. The company forecast that demand for wood products would be better than in 2009 “although still weak and well below pre-crisis levels”.
