Metsä Group Reports Fourth Quarter 2023 Results
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Metsä Group reported fourth quarter 2023 results (as compared to 4Q 2022). In 4Q 2023, sales were EUR 1.486 million (1.741). Operating result was EUR 55 million (316). Comparable operating result was EUR 57 million (311). Net cash flow from operations was EUR 439 million (399).
Events during the fourth quarter of 2023
- The average sales prices for long-fibre pulp increased slightly compared to the previous quarter.
- The demand for market pulp remained quite stable and was stronger in China than in Europe, where demand continues to be restricted by paper and paperboard producers' considerable production curtailment measures.
- The average prices of paperboards decreased slightly from the previous quarter.
- In the paperboard business, the market situation continues to be influenced by weaker demand for consumer products and increased paperboard import volumes from Asia. Production adjustment measures were continued in the paperboard business.
- The expansion of folding boxboard capacity at the Husum mill in Sweden was completed, increasing the mill's production capacity to 600,000 tonnes.
- The prefeasibility study for the construction of the first commercial mill to produce Muoto™ packaging in Rauma was completed.
- Metsä Group announced it was exploring the construction of a carbon capture facility at a pulp or bioproduct mill.
Comments from President and CEO Ilkka Hämälä
"In 2023, economic activity was low, and growth was weak. This was clearly reflected in Metsä Group's business operations and overall result. The prices of capital goods, which increased amid the strong growth experienced in 2021 and 2022, also contributed to weaker results.
"However, the long-term outlook for Metsä Group's products remains good. Wood raw material obtained from sustainably managed forests is converted in our resource-efficient processes into products that people worldwide need in their daily lives. The Group's operations and product development aim to provide the functionality required by consumers with minimal material and energy use, thereby contributing to solving global resource scarcity.
"In the early part of the year, we announced our goal to measurably achieve regenerative forestry by 2030. This means that the measures we adopt in commercial forests improve the prerequisites for biodiversity and its development. Improved biodiversity makes forests more resilient to the strain caused by climate change.
"In 2023, laminated veneer lumber (LVL) was increasingly used in industrial construction solutions. Despite the weak cycle in construction, demand for LVL remains strong, demonstrating the product's competitiveness. Working with our customers, we make construction processes more efficient and the material use in structures more ecological. In the second quarter, we made a decision to construct a new LVL mill featuring two production lines on the Äänekoski mill site.
"The Kemi bioproduct mill came online in September. In its wood supply, the most modern mill in its field relies on the potential increase in felling in northern Finland's commercial forests. The peatland drainage of past decades and forest regeneration have led to a situation in which the harvesting of softwood pulpwood in particular must be increased to safeguard forest growth.
"Production on the expanded folding boxboard machine in Husum began in the last quarter. Thanks to the 200,000-tonne increase in annual capacity, the paperboard machine is now the most efficient of its kind in Europe. The capacity expansion strengthens Metsä Board's position as the folding boxboard market leader in Europe and North America.
"In February 2023, Metsä Tissue made an investment decision on a new tissue paper line in Mariestad, Sweden. The investment covers a paper machine, three converting lines for the machine's output, and automated storage and product dispatch. The output, set to increase by 70,000 tonnes, will be sold on the Scandinavian market. At every stage of the project, there has been a special emphasis on reducing the carbon footprint of tissue paper across the value chain, from raw material procurement to the consumer.
"In line with its goals, our innovation company Metsä Spring invested in new start-up projects. Our projects at the demo plant stage — the MuotoTM 3D fibre product and Kuura® textile fibre - progressed to the investment planning stage to be carried out in 2024.
"We continue to systematically develop our Group to meet society's needs and the owners' expectations. Our financial position is strong, and our competitiveness in our chosen products and market areas ensures the continuity of our operations, regardless of economic cycles."
