Stora Enso Oyj announced a continued profit improvement in its half-year report for 2024, with a strengthened leverage ratio. On May 15, the company raised its full year adjusted EBITDA guidance for 2024, predicting it to be significantly higher than the EUR 342 million reported in 2023. This optimistic outlook is attributed to successful profit improvement initiatives and favorable market conditions.
The company anticipated a gradual market recovery throughout 2024, supported by its profitability initiatives and a reduction in the group’s net debt to EBITDA ratio. Despite these positive trends, Stora Enso warned that high wood costs will continue to impact margins, alongside ongoing market uncertainties such as high inflation, potential strikes, and fluctuating demand and prices.
For the third quarter, Stora Enso’s outlook is slightly positive, driven by strong order books and an improving price outlook. Price increases in the consumer and containerboard segments during the second quarter are expected to boost results in the latter half of the year. The liquid and food service board segments are showing improved stability and demand, while carton board demand remains stable. The kraftliner and testliner segments are also recovering, supported by stable demand and multiple price increases in the first half of the year. However, high fiber costs and higher fixed costs due to annual shutdowns in virgin fiber containerboard units are expected to impact the second half. Paper demand is anticipated to continue its steady decline.
In terms of demand, the third quarter is expected to remain stable with some seasonal fluctuations. Western Europe is likely to see normalized volumes post weather-related delays in the fresh-produce season. While Asia usually experiences a downturn in the third quarter, improvements are expected in the fourth quarter. Demand in Central, Northern, and Eastern Europe should remain consistent despite market challenges from overcapacity.
Looking ahead, overall pulp demand in Europe and China is projected to stay stable. The European softwood pulp market is balanced with no signs of demand improvement, and demand in China remains stable. Fluff pulp demand for hygiene and tissue products continues to be stable, supported by global inventories at or below the five-year average.
The second quarter saw a seasonal surge in volumes of classic sawn products, but sales and volumes are expected to decrease in the third quarter due to the holiday season. Building permits are anticipated to fall below 2023 levels, particularly in Western Europe, and wood costs are forecast to remain high.
Wood market activity in the third quarter is expected to remain strong in Finland, Sweden, and the Baltics, driven by increasing demand for industrial wood such as pulpwood and sawlogs.
Stora Enso maintains leading positions in markets and segments poised for long-term growth, especially in sustainable packaging, wood construction, and innovative biomaterials. The group is set to benefit from sustainability trends and regulatory advancements that favor its offerings, supporting its market presence and future development.
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