Stora Enso's 2Q sales down 5.4%

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SE/IHB
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Stora Enso’s 2Q 2014 sales at Euro 2.58 billion were Euro 147 million lower than a year ago partly due to structural changes in Printing and Reading. Operational EBIT at Euro 209 million was Euro 85 million higher than a year ago due to the successful fixed cost reduction programme clearly exceeding the target and lower variable costs. The operational EBIT margin in 2Q was 8.1%, as the company said in a press release. 

Slightly higher sales prices in local currencies, mainly in Renewable Packaging, increased operational EBIT by Euro 12 million. Lower volumes, mainly due to paper machine closures, decreased operational EBIT by Euro 16 million. Paper and board production was curtailed by 8% (9%) to manage inventories. 

Variable costs decreased by Euro 34 million due to good operational efficiency and lower energy prices. Completion of the streamlining and structure simplification programme reduced fixed costs by Euro 37 million. Depreciation was Euro 20 million lower, mainly due to fixed asset impairments recorded in the 4Q 2013. 

Jouko Karvinen, Stora Enso CEO commented “2Q came out at the high end of our expectations, essentially driven by the better than expected performance of Renewable Packaging and by the Company’s 22% overachievement of the Euro 200 million annual structural cost reduction target. Those achievements combined with the significant improvements in earnings in Printing and Reading and in Building and Living are yet another proof point of the resilience and fighting spirit of the Stora Enso people.” 

In 3Q 2014 sales are forecast to be roughly similar to the Euro 2 579 million and operational EBIT similar to or slightly lower than the strong Euro 209 million in the second quarter of 2014. All segments are scheduled to have maintenance shutdowns during the 3Q. The maintenance impact in the 3Q 2014 is expected to be approximately Euro 30 million higher than in the 2Q.

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