Stora Enso expects high costs, market uncertainty to continue in 2024
Adds shares reaction in paragraph 2, analysts comments, background in 9-11
July 24 (Reuters) -Stora Enso STERV.HE expects pressure from high wood costs and market uncertainties to continue throughout 2024, the Finnish forestry firm said on Wednesday.
The company's shares were down 4.7% at 0830 GMT.
Nordic forestry firms have suffered from weakened demand, elevated wood expenses and low pulp prices. Stora Enso also announced job reductions earlier in the year citing prolonged market uncertainty.
Revenue in the quarter fell 3% year-on-year to 2.30 billion euros ($2.50 billion), missing the average analyst forecast of2.38 billion euros givenin a company-provided poll.
Adjusted operating profit in the quarter was 161 million euros, roughly in line with 160 million euros expected by analysts.
Stora Enso CEO Hans Sohlstrom, in a statement, attributed the sales dip to structural changes.
The company said it expects a gradual market recovery in 2024, but said uncertainties remain, such as high inflation, potential strikes and demand and price fluctuations, which will continue through to the end of the year.
It addedthat high fiber costs will affect its Packaging Materials unit in the second half.
Persistently weak economic prospects in Europe and the tight wood market in the Nordics seem to be curbing optimism, Inderes analyst Antti Viljakainien said in a note to clients.
Stora Enso peer UPM-Kymmene UPM.HE posted lower-than-expected operating profit on Tuesday for the second quarter, blaming high maintenance costs.
Separately, Stora Enso said it appointed Niclas Rosenlew, who is currently chief financial officer at Swedish industrial bearings maker SKF SKFb.ST, as its new CFO.
($1 = 0.9217 euros)
Reporting by Boleslaw Lasocki; Editing by Jacqueline Wong, Janane Venkatraman and Sharon Singleton
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