Stora Enso's 1Q 2020 sales decreased by 16.2%, or Euro 428 million, from last year's record high 1Q level to Euro 2 207 million. Sales prices continued to decline especially in pulp, containerboard, sawn goods and paper. The accelerated structural decline in demand led to clearly lower paper deliveries. Volumes were lower in general, due to the Finnish union strikes. There was a positive impact from currency rates.
Operational EBIT decreased by 46%, or Euro 155 million, from the previous year to Euro 180 million. The operational EBIT margin decreased to 8.1%. The negative effect of the Finnish union strikes in January and February was approximately Euro 25 million.
Operating profit (IFRS) was Euro 262 million. There was a positive impact of Euro 94 million from fair valuations and non-operational items, mainly from increases in forest valuations.
Stora Enso’s President and CEO Annica Bresky said: “The 1Q of the year has been marked by challenging harvesting conditions, strikes in Finland and the start of the Covid-19 pandemic. Lower prices and volumes during the quarter had a negative impact on sales and operational EBIT, compared to the record levels in the 1Q of last year. Under these conditions, “a new normal” where historical references are no longer valid, I am satisfied with our performance for the quarter. We delivered a result of Euro 180 million, in the upper end of our guidance range.
“We were out early with actions related to Covid-19, including a global travel ban, social distancing and appointed work streams to keep business momentum. So far, our operations have been running normally on a global level. We have built a strong liquidity position amounting to Euro 1.4 billion, for a potentially longer and deeper recession. We have actions in place to enhance our cash flow going forward by active working capital management and cost savings. Our profit protection programme is delivering ahead of plan and we have increased our savings target to Euro 350 million (earlier Euro 275 million) by the end of 2021. During this 1Q 2020, we achieved cost savings amounting to Euro 40 million, including one-time cost savings. In regards to managing a potential demand decrease, we have started preparations for potential temporary layoffs or shorter working time if and when needed.”
Stora Enso is a leading global provider of renewable solutions in packaging, biomaterials, wooden constructions and paper.
