Metsä Group’s comparable operating result in January–June 2021 was EUR 416 million
Metsä Group half-year financial report 2021 28 July 2021 at 12:00 noon EEST
January–June 2021 (1–6/2020)
- Sales were EUR 2,942 million (2,453).
- Operating result was EUR 379 million (163). Comparable operating result was EUR 416 million (158).
- Result before taxes was EUR 354 million (139). Comparable result before taxes was EUR 391 million (134).
- Comparable return on capital employed was 15.0% (6.2).
- Net cash flow from operations was EUR 374 million (203).
April–June 2021 (4–6/2020)
- Sales were EUR 1,542 million (1,200).
- Operating result was EUR 243 million (102). Comparable operating result was EUR 242 million (96).
- Result before taxes was EUR 232 million (93). Comparable result before taxes was EUR 231 million (86).
- Comparable return on capital employed was 17.2% (7.6).
- Net cash flow from operations was EUR 279 million (167).
Events during the second quarter of 2021
- The dollar-denominated average market prices of long-fibre and short-fibre pulp increased compared to the previous quarter.
- The delivery volumes of paperboards were record high and demand remained strong.
- The fire on the chip conveyor of the Husum pulp mill stopped pulp production for four weeks.
- Metsä Group initiated a planning process with the City of Äänekoski for expanding the production of mechanical wood products in the Äänekoski mill site.
The coronavirus pandemic
Metsä Group has three key priorities in its operations when it comes to stopping the coronavirus pandemic: personnel safety, full participation in combating the pandemic as part of society and ensuring business continuity. Metsä Group follows and complies with the guidelines issued by the authorities with regard to the coronavirus. Minimising physical contact is the most important precautionary measure.
Metsä Group’s resources have remained normal during the coronavirus pandemic. Production and deliveries have run normally, barring a few exceptions.
Events after the review period
A major investment decision to increase annual folding boxboard production capacity by 200,000 tonnes at the Husum mill was made in July. The value of the investment is approximately EUR 210 million, and it strengthens Metsä Board's position as the leading producer of folding boxboard in Europe. Preparatory work for construction will begin in October 2021 in connection with the planned annual maintenance shutdown of the Husum integrated mill. The ramp-up of additional capacity is expected to start in autumn 2023 and full production capacity to be reached by the end of 2025. The additional capacity will be directed mainly to the North American and European markets, where the demand growth for Metsä Board's paperboards is expected to continue. Metsä Board’s operating result for July–September 2021 will include an impairment loss of approximately EUR 5 million related to the paperboard machine, and it will be reported as an item affecting comparability.
Result guidance for July–September 2021
Metsä Group’s comparable operating result is in July–September 2021 expected to improve from April–June 2021.
President and CEO Ilkka Hämälä:
"The first half of 2021 turned out to be altogether excellent for Metsä Group. The growth in demand as well as the increase in prices in the pulp business and mechanical wood products, which began during the fourth quarter in 2020, continued throughout the period. The paperboard business also continued its strong performance and there, too, the already robust demand continued to improve, due to which price levels in different market areas also took an upward turn. Demand for consumer products in tissue paper was on a significantly lower level than in the previous year, and the intermittent easing of the pandemic did not yet figure greatly in the demand for professional products.
Metsä Group kicked off significant investment projects in 2019–2020 at Rauma, Husum and Kemi. These projects are progressing as planned towards the start-ups of the new units, set to take place in 2022 and 2023. The pick-up in the construction sector and the steep increase in steel prices have placed cost pressures on the projects.
A major investment decision to increase annual folding boxboard production capacity by 200,000 tonnes at the Husum mill was made in July. The Group continues to develop its core business operations with the planning phase of the Mariestad tissue paper mill and the development plan for the mechanical wood processing business, to be implemented in the area of the Äänekoski mill site. The earliest date at which the related investment decision considerations will be become topical is in 2022, when the projects’ environmental permit and detailed planning processes will be completed.
Metsä Spring continues its work in developing new forest industry business opportunities. Since the establishment of the innovation company, we have invested in five projects related to the value chains of our raw materials and products. The goal of these projects is to bring about value creation through new operations, functioning alongside the Group’s strong basic industry units.
Metsä Spring’s biggest projects are the demo plant for textile fibres operating in Äänekoski, and the demo plant for 3D fibre packaging, which will be completed during the second half of this year, also in Äänekoski.
Climate change and the loss of biodiversity are issues of a global scale, the combating of which must be taken into account in all decision-making. Finnish forests are a significant primary source for the global market’s need for products made from renewable raw materials. We make products for people’s everyday life and well-being. These products must be made as material-efficiently as possible and without fossil fuels. This requires the long-term development of our industry and a readiness to invest in our business.
The forestry operations require further development both for greater wood production, and thereby greater carbon binding, and, simultaneously, for methods that better maintain biodiversity. We need more measures to protect valuable forest ecosystems and, at the same time, continuously renewing methods for wood production in commercial forests that are increasingly sound in both economic and ecological terms. It is important to take into account – in EU-level legislation and strategies as well as in national decisions – the significance that the forest industry’s entire value chain has in terms of both climate and environmental issues and national economic success. We are ready to contribute to the development work. The industry needs predictabile and a stable operating environment."
KEY FIGURES
|
2021 |
2020 | 2021 | 2020 | 2020 | |
| 1–6 | 1–6 | 4–6 | 4–6 | 1–12 | |
| Sales, EUR million | 2,941.9 | 2,452.7 | 1,542.3 | 1,199.7 | 5,054.9 |
| EBITDA, EUR million | 572.1 | 324.7 | 318.3 | 183.3 | 679.3 |
| Comparable, EUR million | 570.9 | 320.0 | 317.2 | 177.2 | 670.9 |
| % of sales | 19.4 | 13.0 | 20.6 | 14.8 | 13.3 |
| Operating result, EUR million | 379.0 | 163.2 | 243.2 | 102.1 | 375.8 |
| Comparable, EUR million | 416.0 | 158.5 | 242.1 | 96.1 | 367.7 |
| % of sales | 14.1 | 6.5 | 15.7 | 8.0 | 7.3 |
| Result before income tax, EUR million | 353.7 | 138.7 | 232.3 | 92.5 | 330.1 |
| Comparable, EUR million | 390.7 | 134.0 | 231.2 | 86.5 | 322.0 |
| Result for the period, EUR million | 282.6 | 109.1 | 184.5 | 74.0 | 262.2 |
| Return on capital employed, % | 13.7 | 6.4 | 17.2 | 8.1 | 7.2 |
| Comparable, % | 15.0 | 6.2 | 17.2 | 7.6 | 7.1 |
| Return on equity, % | 13.5 | 5.8 | 17.1 | 8.0 | 6.8 |
| Comparable, % | 15.0 | 5.6 | 17.0 | 7.5 | 6.6 |
| Equity ratio, % | 59.5 | 56.4 | 59.5 | 56.4 | 57.2 |
| Net gearing ratio, % | -1.3 | 11.4 | -1.3 | 11.4 | 4.3 |
| Interest-bearing net liabilities, EUR million | -59.5 | 422.8 | -59.5 | 422.8 | 167.7 |
| Total investments, EUR million | 430.8 | 167.7 | 257.2 | 105.9 | 400.5 |
| Net cash flow from operations, EUR million | 373.6 | 203.0 | 278.7 | 167.3 | 667.4 |
| Personnel at the end of the period | 10,070 | 9,854 | 10,070 | 9,854 | 9,213 |
|
Sales and Operating result 1–6/2021, |
Wood Supply and Forest Services | Wood Products Industry | Pulp and Sawn Timber Industry | Paperboard Industry | Tissue and Greaseproof Papers |
| Sales | 1,023.1 | 297.0 | 1,213.5 | 1,049.5 | 448.1 |
| Other operating income | 2.0 | 0.5 | 8.2 | 14.3 | 4.1 |
| Operating expenses | -1,004.8 | -273.6 | -915.5 | -831.9 | -413.3 |
| Depreciation and impairment losses | -5.2 | -10.1 | -100.6 | -46.3 | -21.7 |
| Operating result | 15.2 | 13.8 | 205.6 | 185.6 | 17.2 |
| Items affecting comparability | 0.0 | 0.0 | 34.5 | 5.7 | 0.0 |
| Comparable operating result | 15.2 | 13.8 | 240.1 | 191.3 | 17.2 |
| % of sales | 1.5 | 4.7 | 19.8 | 18.2 | 3.8 |
NEAR-TERM OUTLOOK
The demand for wood focuses on stands to be harvested when the ground is unfrozen. Both crown wood and energy wood trunks are purchased as energy wood. The demand for forest management services remains good.
Demand at Metsä Wood is expected to remain very good in all product categories across its main markets. The demand for Kerto® LVL is expected to remain strong in all the main markets, in line with the robust construction sector. Demand for spruce plywood is expected to remain very good in the main markets due to the limited availability of substitute products. Demand for birch plywood is expected to remain exceptionally strong, particularly in the transport industry. Demand at Metsä Wood’s UK business is expected to remain strong over the next few months.
Demand for softwood market pulp is expected to remain good in Europe and to strengthen in China as demand for paper and paperboard grows seasonally after a period of lower demand. Demand for sawn timber is expected to remain strong in all major markets as construction activity continues. The annual maintenance shutdown of Metsä Fibre’s Kemi pulp mill will take place during the third quarter.
The delivery volumes of Metsä Board’s paperboards in July–September are expected to decline from the record high delivery volumes in April–June and January–March. The decline is partly due to the fire of the Husum pulp mill’s chip conveyor in June, which resulted in production losses of some 26,000 tonnes in paperboard and 55,000 tonnes in pulp. Market pulp deliveries are also expected to decline. The average prices of Metsä Board’s folding boxboard and white kraftliners in local currencies are expected to improve in July–September, compared to the average prices in April–June.
Uncertainty about the impact that the coronavirus pandemic will have on the short-term demand for products will continue in the countries in which Metsä Tissue operates. Demand for tissue paper products is expected to increase as the restrictions resulting from the pandemic are lifted. Demand for greaseproof papers is expected to continue to grow slightly. To ensure profitability, the company is responding to a rise in the costs of raw materials and other costs through the active steering of its pricing.
METSÄ GROUP
For further information, please contact:
Vesa-Pekka Takala, EVP, CFO Metsä Group, tel. +358 10 465 4260
Juha Laine, SVP, Communications, Metsä Group, tel. +358 10 465 4541
Metsä Group
www.metsagroup.com
Metsä Group is leading the way in advancing the bioeconomy. We invest in growth, bioproduct development and a fossil free future. The raw material for our products is renewable wood from sustainably managed northern forests. We focus on the growth sectors of the forest industry: wood supply and forest services, wood products, pulp, fresh fibre paperboards, as well as tissue and greaseproof papers.
Metsä Group’s annual sales amount to approximately EUR 5.5 billion, and we have around 9,200 employees in 30 countries. Our international Group has its roots in the Finnish forests: our parent company is Metsäliitto Cooperative which is owned by 100,000 forest owners.
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