Metsä Board has released its Interim Report for the period 1 January– 31 March 2020. Sales were €472.1m (€487.1m in same period 2019). Comparable operating result was €33.8m (61.8), or 7.2% (12.7%) of sales. Operating result was €33.8m (71.9).
The company reported that the coronavirus pandemic has temporarily increased demand for pure and safe packaging materials and the order inflows of Metsä Board’s paperboards have grown. In delivery logistics, there have been occasional capacity bottlenecks. So far, the coronavirus has not had an impact on the production of Metsä Board’s mills. To minimise physical contact, the scope of the annual maintenance of mills scheduled for the second quarter of the year have been scaled down and partly postponed. The coronavirus outbreak has temporarily increased demand for folding boxboard and white kraftliner. Metsä Board’s paperboard deliveries were on a higher level than in the corresponding period last year.
The strike at Finnish mills began on 27 January and ended on 10 February 2020. The strike concerned all Metsä Board’s mills in Finland and all pulp mills of Metsä Board’s associated company Metsä Fibre. The strike is estimated to have a negative impact of approximately €20m on Metsä Board’s operating result. Of this, approximately €15m materialised in the first quarter.
Metsä Board’s paperboard deliveries in the second quarter are expected to remain roughly on the level of the first quarter of 2020. They state that market prices of folding boxboard and white kraftliner in local currencies are expected to remain stable. The production costs of paperboard and pulp are expected to remain stable.
The annual maintenance shutdowns of mills scheduled for April–June have partly been postponed to the second half of the year.
Metsä Board’s CEO, Mika Joukio, said,“Our operating result in January–March was €33.8m, when it was almost double that in the corresponding quarter last year. The main reason for the weaker result was the cheaper price of market pulp. Also, the two-week strike of paper industry workers early in the year had a big impact on us, given that a majority of our production is located in Finland. It is difficult to estimate the ultimate impact that the global spread of the coronavirus, which began during the review period and continues to this day, will have on our business. The pandemic has decreased demand in certain end uses of paperboard. On the other hand, it has accelerated the demand for food and pharma packaging, for example. So far, the pandemic’s net effect on the order inflow of Metsä Board’s paperboards has been positive.
“Despite the exceptional circumstances, our production of folding boxboard was at a record high in March. Our investment projects also continued according to plan: Foundation work got under way in Husum’s recovery boiler project in Sweden and the winder project at Kyro mill in Finland has progressed according to the original schedule.
“The pandemic will significantly weaken the world economy, and is also likely to have a negative impact on Metsä Board’s business and profitability. Even so, as a company we have a strong foundation – skilled people, the industry’s leading products and innovative packaging solutions. Furthermore, demand for pure and safe products made from a renewable raw material can be expected to continue.
“For now, the most important things are our personnel’s safety, ensuring the continuity of our business and preventing further spread of the pandemic. I have proudly taken note of how well our personnel have performed and coped with this challenging time. These exceptional circumstances will come to an end at some point, and I believe that, once things get back to normal, we will be in an even stronger position to respond to our customers’ needs.”
