Metsä Group reported increased sales in 2015, reaching a total amount of EUR 5,016 million, compared to EUR 4,970 in 2014, according to the press release of the company. Excluding the non-recurring items, the operation results reached EUR 537 million, increasing from EUR 418 million in 2014. With the non-recurring items, the sales totaled EUR 542 million. Moreover, from the EUR 764 million of cash flow from operations, Metsä Group increased to EUR 964 million.
Sales for the 4Q 2015 decreased from EUR 1,248 million in 2014 to EUR 1,205, while the operating results excluding non-recurring items was EUR 123 million, compared to the EUR 117 million of the same period last year. The cash flow from operations for the 4Q reached a total amount of EUR 338 million, descending from the same period of 2014, when it reached EUR 390 million.
The increase of the operating results was due to the strong pulp delivery volumes, while the paperboard deliveries decreased slightly on a seasonal basis.
Also, the changes in outcome were favoured by Metsä Board’s installation of the new paperboard machine at the Husum mill in Sweden and the construction of Metsä Fibre's bioproduct mill in Äänekoski, that progressed according to plan. Moreover, the group sold the share capital of Metsä Wood's French timber upgrading company, Metsä Wood France SAS, to Mutares AG in October 2015.
Further on, Metsä Board announced it would expand its range of paperboard for food service packaging by investing EUR 38 million in extrusion coating at the Husum mill in Sweden.
The group expects the operating result excluding non-recurring items in the first quarter of 2016 to be approximately on the same level as in the fourth quarter of 2015.
“Metsä Group’s business operations developed favourably in 2015. Our sales grew, and operating result excluding non-recurring items was markedly better than in 2014. Our cash flow was at a good level and balance sheet strenghtened. We benefitted from exchange rate changes to some extent, but our stronger performance was based above all on our long-term work to improve efficiency and profitability,” said Kari Jordan, president and CEO of Metsä Group.
Outlook
According to Metsä, wood demand will focus on felling sites to be harvested when the ground is unfrozen and, in terms of energy wood, on crown wood. The sales of forest management services are expected to grow.
Metsä Wood’s sales are expected to be on a similar level as previous year’s first quarter. In the first quarter, the sawn timber market balance is expected to improve for spruce sawn timber. For pine sawn timber, oversupply is expected to continue due to weak demand in the EMEA sales region. Shutdowns are possible in birch plywood production, depending on the market situation. Demand for other wood products is expected to continue stable.
The global economic uncertainty and changes in the currency market will impact Metsä Fibre's operating environment. Nevertheless, global demand for pulp has remained stable, and there are no signs of material changes in the market situation.
Metsä Board's paperboard deliveries are in January–March expected to grow from the last quarter of 2015. The new paperboard production line at Husum, still in the start-up phase, will have the effect of decreasing the average price of folding boxboard. The company estimates that the required quality targets will be reached by the third quarter of 2016 according to the original plan.
In the tissue and cooking paper markets, demand is expected to continue stable in all market areas. Demand for tissue paper will increase in eastern Central Europe, in particular, and demand for cooking papers will grow in Asia.
Metsä Group’s operating result excluding non-recurring items is in the first quarter of 2016 expected to be approximately on the same level as in the fourth quarter of 2015.
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