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Stora Enso's profit disappoints as pulp markets start to cool

Published 07/22/2022, 01:42 AM
Updated 07/22/2022, 05:40 AM
© Reuters. FILE PHOTO: The Stora Enso company logo is seen near a packaging mill in Riga, Latvia September 18, 2012. REUTERS/Ints Kalnins
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HELSINKI (Reuters) -Shares in Stora Enso (OTC:SEOAY) skidded 9% on Friday after the Finnish-Swedish forestry company blamed logistics bottlenecks and cooling pulp and timber markets for less buoyant than expected second-quarter earnings.

The maker of pulp, packaging, wood construction materials and other forestry products said its April-June comparable operating profit rose 39% to 505 million euros ($513.08 million), reflecting strong demand for package material but well below forecasts from analysts polled by Refinitiv for a rise of 55%.

Quarterly sales rose 18% to 3.05 billion euros, falling short of analysts' expectations for revenue of 2.98 billion euros.

Difficulties in getting containers and cargo ships led to late deliveries and sales being moved from "quarter to quarter", Chief Financial Officer Seppo Parvi told Reuters.

He added that the company has seen signs of inflation steadying but the outlook for energy prices remained an uncertainty. He also said demand for pulp should remain strong in Europe and China.

Stora's shares were down 9.12% at 0905 GMT. They have now fallen 26% from a 20-year high touched in April.

"The estimate miss came actually completely from the pulp business where volumes were hit by supply chain problems and what seemed like a slightly soft margin," Inderes analyst Antti Viljakainen said, adding it fed into investor worries about easing demand.

© Reuters. FILE PHOTO: The Stora Enso company logo is seen near a packaging mill in Riga, Latvia September 18, 2012. REUTERS/Ints Kalnins

Stora maintained its earnings guidance published in June that 2022 operating profit should exceed last year's 1.53 billion euros.

($1 = 0.9843 euros)

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