Metsä Group's operating result excluding non-recurring items burdened by lower sales prices


Metsä Group has posted lower sales and a weaker operating result excluding non-recurring items in 2012. The company blamed this development mainly on a decrease in prices for pulp and office paper.

Sales of Finnish Metsä Group in the last fiscal year amounted to €5bn (2011: €5.35bn). The year-on-year drop is largely a result of closures or restructuring of business units within the group, according to the financial report published at the beginning of February. The report declares an operating profit excluding non-recurring items of €252m (2011: €314m). This result was reportedly impacted especially by lower pulp and office paper prices. Including non-recurring items, the operating profit for the reporting year amounted to €237m (€29m). The company's net profit in 2012 stood at €103m (-€157m).

Considering market conditions, results for 2012 have been satisfactory, said Kari Jordan, President and CEO of Metsä Group, adding that the operating result excluding non-recurring items improved from one quarter to the next.

The pulp segment of the company in 2012 generated sales of €1.27bn (€1.30bn) and booked an operating profit of €150m (€263m). Lower than in the previous year, both figures primarily reflect weaker pulp prices, the company said. However, market signals at the end of last year indicated a reversal towards upward price trends, Metsä added. The company’s pulp output in 2012 amounted to 2,237,000 t (2,205,000 t).

Metsä Board generated sales of €2.11bn (€2.49bn) and an operating profit of €220m (-€214m). A total of €146 million of non-recurring items were recognised during the year. These were related to the divestment of the 7.3% holding in Metsä Fibre to Itochu Corporation, the sale of the 0.5% holding in Pohjolan Voima to Metsä Fibre and property transactions, Metsä said. Excluding those items, the operating profit stood at €74m (€59m). Higher deliveries of cartonboard and liner, lower losses posted by idled or restructured business units and the increase in the valuation of the US dollar and the British pound were also said to have had positive effects.

Sales of Metsä Tissue in 2012 touched €982m (€971m). The company said that sales of its proprietary brands increased by 4%. Operative earnings in this segment amounted to €33m (€20m). Contributing factors for the improvement reportedly include lower raw material costs and greater efficiency and economy of the mill in Düren. The company believes that demand in this market will increase. In 2013, Metsä Tissue will especially focus on Poland and Russia.

As regards developments in the current year, Metsä expects delivery volumes of folding boxboard and linerboard to rise slightly during the first three months of 2013 compared to the previous quarter. As a result of the completed annual folding boxboard contract negotiations, the volumes are increasing in 2013 compared to last year and no material price changes for folding boxboard nor for linerboard are expected, the group said.

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