Stora Enso said that demand for its products – with the exception of graphic paper – had recovered strongly in Q2.
President and CEO Annica Bresky cited a number of improving figures that excluded the group’s paper wing.
“As the global economy recovers from the impacts of the pandemic, our strong performance continued in the second quarter of the year. With profitable growth of over 28% excluding Paper, we once again prove the strength of our core businesses. This is the result of close collaboration with brand owners and customers as well as the steps that we are taking in executing on our strategy,” she stated.
Operational EBIT (again excluding Paper) increased to over €410m (£351m), up more than 90% year on year, and driven by Biomaterials, Wood Products and Packaging Materials.
However, Bresky said there was a “turnaround in sight” at the Paper wing, which instigated a major mill closure programmer earlier this year.
“In Paper, we have solid order books, but costs for raw materials are high and not yet fully compensated through price increases causing a low result for the division. In addition, we have had production issues at our Langerbrugge and Maxau sites,” she said.
“Both sites are now back on track and in full operation. Recent structural changes along with some targeted investments, make me confident that we are shaping a paper business that is more focused and cost-efficient. Looking beyond the quarter, there is a turnaround in sight.”
Stora Enso said that the ramp-up of kraftliner production line at Oulu, which was converted from the production of coated woodfree graphic paper, was “proceeding ahead of schedule”.
The group’s profit protection programme has also been completed ahead of plan.
Overall sales increased by 22.6% to €2.592bn. Sales excluding Paper increased by 28.4%.
Paper production increased by 14% year-on-year in the quarter, to 741,000 tonnes, while paper deliveries were up 15.2% at 767,000 tonnes.
“The restructuring in the Paper division is expected to improve the supply– demand balance,” the group stated.
Sales for the half year were up 12.7% to EUR 4.868bn “mainly due to market recovery from the Covid-19 pandemic and the negative impact from the Finnish union strikes in the first quarter of 2020”.
Operational EBIT (including Paper) increased by 93.6% to €692m, excluding Paper the figure was €775m.