Metsä Group reported a substantial year-over-year improvement in second-quarter profitability as its cost-saving programme supported earnings despite lower sales, currency headwinds and difficult conditions in several forest products markets.
The Finnish forest industry group generated EBITDA of EUR 117 million in the April–June period, up from EUR 60 million a year earlier. Comparable EBITDA increased to EUR 129 million from EUR 68 million.
Quarterly sales declined by 3% to EUR 1.38 billion from EUR 1.43 billion. The operating loss narrowed to EUR 16 million from EUR 46 million, while the comparable operating result improved to a loss of EUR 3 million from EUR 37 million.
The result before taxes remained negative at EUR 40 million, compared with a loss of EUR 61 million in the second quarter of 2025. Net cash flow from operations increased to EUR 42 million from EUR 19 million.
“Our EBITDA rose from EUR 60 million to EUR 117 million,” President and CEO Jussi Vanhanen said. He noted that profitability improved across all business areas except wood products, although the overall level remained below the group’s expectations.
Savings programme exceeds expectations
Metsä Group launched a programme in 2025 targeting EUR 300 million in permanent annual savings by the end of 2027. According to Vanhanen, the initiative has progressed faster than expected, and the group now anticipates significantly exceeding its original target.
The savings contributed to the improved quarterly result, although some of the gains were passed on to customers through lower selling prices. Unfavourable exchange-rate movements also continued to weigh on performance.
For the first half of 2026, sales declined to EUR 2.74 billion from EUR 3.07 billion. EBITDA totalled EUR 231 million, compared with EUR 250 million a year earlier, while comparable EBITDA decreased slightly to EUR 257 million from EUR 265 million.
The group recorded a first-half operating loss of EUR 33 million, compared with an operating profit of EUR 6 million in 2025. The comparable operating result was a loss of EUR 7 million, versus a profit of EUR 44 million.
Operating cash flow for the six-month period was negative at EUR 37 million, compared with a positive EUR 10 million a year earlier. Investments were reduced to EUR 103 million from EUR 219 million.
Pulp demand remains subdued
Demand for market pulp remained muted in Europe and China during the second quarter. Metsä Group continued its market-related production shutdown at the Joutseno pulp mill throughout the period.
Average invoicing prices for softwood market pulp increased by 8% in Europe from the first quarter but declined by 3% in China.
The near-term outlook for softwood market pulp remains challenging because of weak consumer confidence, the substitution of hardwood pulp for softwood grades and the structural decline in demand for printing and writing papers. At the same time, mill closures and announced production reductions are limiting global softwood pulp supply.
Paperboard delivery volumes increased from the first quarter. Pricing and demand also improved toward the end of the first half, providing some support for market conditions in the remainder of the year.
Demand for tissue products is expected to remain stable, while the European greaseproof paper market continues to face increased competition from China.
Investments and restructuring continue
Metsä Group inaugurated the EUR 370 million expansion and modernization of its tissue paper mill in Mariestad, Sweden, in May. The project doubled the mill’s annual production capacity to approximately 145,000 tonnes while improving its energy and environmental performance.
In the wood products business, profitability measures will result in approximately 100 job reductions in the United Kingdom and another 100 across Finland and Estonia. Production at the Suolahti softwood plywood mill ended in May.
The group also launched a programme with Finnish technology company Qutwo to expand the use of artificial intelligence across its value chain. Initial applications include optimizing wood procurement and improving productivity on converting lines.
Higher oil prices create additional risk
Metsä Group warned that continued geopolitical tensions and higher oil prices could increase transportation and chemical costs. Although approximately 95% of the energy used in its production is fossil-free, oil prices affect logistics throughout the supply chain.
The group estimates that an oil price of USD 100 per barrel would increase annual costs by approximately EUR 200 million compared with a price of USD 70.
Annual maintenance shutdowns at the Äänekoski bioproduct mill, the Rauma pulp mill and the Husum mills are scheduled for the third quarter and are expected to significantly reduce quarterly earnings.
Metsä Group is a Finnish forest industry company owned by approximately 90,000 forest owners through its parent, Metsäliitto Cooperative. Its activities include pulp, paperboard, tissue and greaseproof papers, wood products, and wood supply and forest services. The group reported sales of EUR 5.8 billion in 2025 and employs approximately 8,800 people.
