Metsä Group shares first quarter 2025 financial results

Metsä Group recorded sales of EUR 1.642 billion in the first quarter of 2025, compared to EUR 1.457 billion in the same period last year. The operating result reached EUR 51 million, slightly down from EUR 58 million, while the comparable operating result improved to EUR 81 million (up from EUR 70 million).

The result before taxes totaled EUR 37 million (EUR 45 million in Q1 2024), and the comparable result before taxes rose to EUR 67 million from EUR 57 million. The comparable return on capital employed was 4.4% (previously 4.0%), and the net cash flow from operations was EUR -10 million, a significant improvement compared to EUR -137 million last year.

During the first quarter, average sales prices of softwood pulp remained stable in Europe and rose 3% in China. Demand for the product remained steady in Europe and North America but declined in China in March. Global softwood pulp supply has fallen due to previous capacity shutdowns.

Metsä Group reported an increase in paperboard delivery volumes compared to the previous quarter, with prices holding steady. The company announced the closure of the Tako board mill and efficiency improvements at the Kyro mill, resulting in the loss of 208 jobs.

In February, Metsä initiated the pre-engineering of a Kuura textile fiber mill to prepare for industrial-scale production. Plans are also underway for capacity adjustments and equipment renewals at the Kreuzau and Mänttä tissue paper mills, with the latter transitioning away from recycled fiber. Negotiations are ongoing at both facilities.

Jussi Vanhanen was appointed as the new CEO of Metsä Group, effective July 1, 2025.

FORECAST FOR Q2 2025

The company expects its comparable operating result for April–June 2025 to be weaker than that of the first quarter.

Statement from President and CEO Ilkka Hämälä:

“Like last year, the first quarter of 2025 was marked by low demand and a weak financial result. Comparable result improved from the first quarter of 2024, largely because of the impact of political strikes in the comparison period”.

He noted that the market outlook remains in line with previous reports, with continued strong demand for Kerto® LVL, stable prices for sawn timber, and uncertainties in the pulp market due to China’s economic situation and rising eucalyptus pulp capacity.

The folding boxboard market continues to suffer from overcapacity caused by Asian producers. In contrast, the market for coated linerboard remained normal, while new US tariffs create uncertainty in delivery estimates. The tissue and greaseproof paper segments remain stable.

Hämälä highlighted ongoing investment projects, including equipment installation at the Äänekoski Kerto LVL mill and progress at the Mariestad tissue paper mill. He also mentioned the lignin demo plant in Äänekoski and preparations for a carbon capture demo unit in Rauma.

A development program is underway at the Simpele board mill, with a EUR 60 million investment expected to be completed in the second half of 2025. The company is also implementing changes at its Kreuzau and Mänttä mills to improve efficiency, which will result in the shutdown of outdated production lines.

The shutdown of the Tako board mill and adjustments at Kyro will eliminate over 200 jobs. Production at the Suolahti birch plywood mill also ended as previously announced.

According to Hämälä, forest industry demand continues to grow globally, and Finland remains a favorable location for profitable operations. Metsä Group has a strong equity ratio of 57% and net gearing around 20%. The company is focused on increasing the added value of its products and reducing reliance on fossil raw materials.

Hämälä concluded by thanking stakeholders and owner-members in his final interim report as CEO.

 

NEAR-TERM OUTLOOK

Wood demand will focus on summer harvest sites and roundwood from delivery sales. Energy wood demand is expected to target crown wood and small trees. Demand for forest management services is set to increase.

In much of Europe, the construction outlook remains weak, impacting demand for spruce plywood, although Kerto LVL products remain stable. Birch plywood demand is expected to remain stable, but demand for specialty grades remains low.

In the UK, demand in the DIY segment is steady, while the wholesale and new construction segments show weakness. US tariffs are increasing global economic uncertainty and could reduce market pulp demand by altering trade flows.

Softwood pulp supply is expected to decline further due to earlier capacity closures and limited wood availability in North America. A seasonal rise in sawn timber demand is anticipated in Q2.

A five-week repair shutdown will take place at the Kemi bioproduct mill to replace parts damaged in the 2024 gas explosion. Compensation discussions with the insurance company will resume afterward.

Consumers remain cautious, and the rapid increase in fresh fiber paperboard supply, especially in the EMEA region, adds unpredictability to sales. US tariffs will also impact board sales development. Metsä Board’s delivery volumes are expected to remain similar to Q1.

Kraftliner production will also be affected by the Kemi shutdown, while demand for tissue and greaseproof papers is expected to stay stable.