Metsä Board’s CEO Mika Joukio:
“In October–December, demand for paperboards was lower than expected, and our delivery volumes decreased from the previous quarter. We adjusted production to match the low demand at several of our mills. Our profitability was also burdened by the repair shutdown at Metsä Fibre’s Kemi bioproduct mill, which lasted for about a month. Our sales in October–December amounted to EUR 446 million, and our comparable operating result was EUR -3.6 million.
We had a positive start to 2024, with paperboard demand picking up clearly from the previous year’s record low level. However, activity faded towards the end of the year, and our paperboard deliveries, amounting to approximately 1.5 million tonnes, remained below our capacity level. Demand is still constrained by cautious purchasing behaviour and consumption focusing more on services than products. In addition, market balance has been influenced by the strong growth in Asian paperboard capacity and increasing paperboard imports especially to Turkey, the Middle East and South America.
In 2024, return on capital employed was around 3.2 per cent, compared to our target of at least 12 per cent. In addition to a challenging market situation, our profitability was negatively affected by high cost level, which we must continue to take into account also in the future.
Moreover, various unexpected events beyond our control occurred over the year. The political strikes in Finland, the gas explosion at Metsä Fibre’s Kemi bioproduct mill in the spring, as well as the repair shutdown at the end of the year, resulted in production losses and had a negative impact on our profitability. Thanks to our organisation’s expertise and resilience, we maintained production with special arrangements, thus minimising any harm to our customers.
Roughly a year ago, two significant investments increasing our annual paperboard capacity were completed in Husum and Kemi. In 2024, we decided not to invest in a new folding boxboard mill in Kaskinen. The reason was the high cost level, which clearly exceeded our original estimate and meant that the investment did not meet our financial targets.
Our profitability is at an unsatisfactory level, and the measures adopted so far to improve it have been insufficient. In January, we announced our plans to shut down the Tako mill and improve operational efficiency at the Kyro mill. Due to the challenging market situation and quickly rising cost level, both mills have operated unprofitably in recent years. The possible closure of the Tako mill would not affect customer deliveries, as our overall paperboard production capacity would be sufficient meet current demand.
We have initiated change negotiations at both mills. No decisions concerning personnel reductions and the Tako mill’s closure will be made until the negotiations have been concluded. Naturally, these measures, if implemented, would be very difficult for us. However, we must consider different alternatives for improving our competitiveness and profitability.
We are determined to continue our sustainability work. Our aim of fossil-free production and products by the end of 2030, which will also help our value chain operators achieve their sustainability targets. We have proven evidence of the low carbon footprint of our paperboards, which is an increasingly important issue for our customers.
We have a solid financial position, although we have invested significantly in recent years. We will continue to develop our business as planned. Thanks to our lightweight, high-quality fresh fibre paperboard and our wide range of services, we are well positioned to respond to increasing regulation and competition.”
Source: Metsä Board
