Stora Enso: Own actions support earnings despite challenging market conditions

Stora Enso reported a stable start to 2026, although profitability weakened from the comparison period as geopolitical uncertainty, currency effects and the ramp-up of the new consumer board line in Oulu weighed on results.

The forest industry group’s sales in January–March remained almost unchanged year-on-year at EUR 2.36 billion (2.36 billion). Adjusted EBIT declined by 9 percent to EUR 159 million (175 million), while the adjusted EBIT margin fell to 6.7 percent (7.4).

According to President and CEO Hans Sohlström, market conditions remained challenging throughout the quarter. Demand stayed relatively weak in the company’s main end markets, while pricing pressure continued in several business areas.

Stora Enso said lower wood costs supported profitability, but the positive impact was offset by negative foreign exchange movements and the continued ramp-up of the new consumer board production line at the Oulu mill in Finland.

The company’s IFRS operating result fell to EUR 85 million (171 million). Earnings per share decreased to EUR 0.04 (0.14).

Oulu ramp-up continues

The ramp-up of the new consumer board line in Oulu continued during the quarter, with production volumes gradually increasing. The company expects the line to reach full capacity during 2027.

According to Sohlström, the focus during the quarter was on improving the technical runnability of production. Combined with the weak market situation, the ramp-up continued to burden profitability and is expected to have a similar negative impact also during the second quarter.

Geopolitical tensions increase uncertainty

Stora Enso highlighted growing geopolitical uncertainty as a major concern going forward. The company said tensions in the Middle East are expected to increase costs especially related to logistics, chemicals and energy during 2026.

The company noted that the effects of the conflict intensified towards the end of the quarter and are likely to become more visible during the second quarter.

Market conditions are expected to remain challenging during the spring due to low consumer confidence and continued volatility.

Swedish forest assets separation progresses

Preparations for separating Stora Enso’s Swedish forest assets business into a new publicly listed company are continuing as planned. The new company, currently operating under the name Bergslagets Skogar, is expected to be separated during the first half of 2027.

At the same time, Stora Enso’s strategic review concerning its Central European sawmills and building solutions operations remains ongoing.

Cash flow weakened

Cash flow from operations declined to EUR 125 million (192 million), mainly due to higher restructuring-related site closure costs and increased working capital.

However, cash flow after investing activities improved to EUR -22 million (-47 million), supported by lower investment spending.

The company’s net debt to adjusted EBITDA ratio improved slightly to 3.1 (3.2).

Outlook for Q2 remains cautious

For the second quarter of 2026, Stora Enso expects market conditions to remain difficult. The company estimates that the negative earnings impact from the Oulu ramp-up will continue at roughly the same level as during the first quarter.

In addition, revenue from emission rights sales is expected to decline significantly in 2026 due to changes in the EU Emissions Trading Scheme rules.