Metsä Group posted a comparable operating loss of EUR 85 million for 2025, reversing a profit of EUR 203 million a year earlier.
The Finnish forest industry group faced sluggish pulp and paperboard demand, rising fixed costs, and structural market challenges that weighed heavily on earnings despite steady sales.
For the year, sales edged up 1.5% to EUR 5.83 billion. Reported operating profit plunged to a loss of EUR 271 million from a EUR 186 million gain in 2024. Operating cash flow, however, was strong at EUR 537 million, reflecting tighter working capital management and reduced inventories in the second half of the year.
Weak market conditions persist
Market pulp demand remained lacklustre across both Europe and China, further constrained by lower average prices—down 1% in Europe and 3% in China compared with the previous quarter. Metsä’s Joutseno pulp mill was idled for half of the year due to weak market conditions.
Paperboard deliveries and prices also declined, leading to curtailed production designed to free up working capital. The company’s tissue and greaseproof paper segment remained more resilient, generating a comparable operating profit of EUR 72 million.
The October–December quarter was marked by a EUR 57 million comparable operating loss, including EUR 40 million in insurance compensations related to Kemi bioproduct mill damages. Concurrently, Metsä recognised one-time expenses totalling EUR 140 million due to restructuring and suspension of its enterprise resource planning renewal project.
Streamlining and restructuring
To tackle eroding margins, Metsä launched a multi-year cost saving and profitability programme targeting EUR 300 million in annual savings from 2026 onwards. Change negotiations affecting all employee groups led to nearly 800 permanent job cuts, with related expenses of EUR 44 million booked in the final quarter.
President and CEO Jussi Vanhanen said the measures were necessary to restore cost competitiveness and stabilize future results. “Our current outlook suggests two-thirds of the planned savings will materialize in 2026,” Vanhanen said. He highlighted declining wood prices as a positive factor for the year ahead, alongside continued improvements in operational safety.
Investments and outlook
Metsä Group maintained an investment level of more than half a billion euros in 2025, completing major upgrades at its Simpele paperboard mill and expanding the Mariestad tissue paper facility in Sweden. In 2026, capital expenditure will ease, focused mainly on the start-up of the Äänekoski Kerto® LVL mill.
Post year-end, Metsä Board agreed to acquire the Winschoten Sheeting and Distribution Hub in the Netherlands, strengthening its European supply network. Metsäliitto Cooperative also increased its ownership in Metsä Fibre to 55.2% after purchasing a 5.1% stake from Itochu Corporation.
Looking ahead, the Group expects subdued demand for pulp and packaging to persist through early 2026 amid geopolitical tensions and weak consumer confidence. Declining wood prices and early cost savings, however, are expected to support a gradual improvement in profitability.
Metsä Group is a Finnish forest industry group operating in pulp, paperboard, tissue and greaseproof papers, wood products, and wood supply and forest services. Owned by Metsäliitto Cooperative, which has more than 90,000 Finnish forest owner members, the Group focuses on renewable, fibre-based solutions. Metsä Group reported sales of EUR 5.8 billion in 2025 and employs around 8,800 people, primarily in Europe and North America.
Source: Metsä Group
