Stora Enso beats quarterly profit view, flags challenging market conditions in 2025

By Agnieszka Olenska and Elviira Luoma

Finnish forestry group Stora Enso's <STERV.HE> quarterly operating profit beat estimates on Wednesday, but the company expects subdued and volatile demand to persist through the rest of 2025.

Stora Enso expects an adverse impact of "around or somewhat above" 100 million euros on the full-year adjusted earnings before interest and taxes, due to the scaling up of a new consumer packaging board line at the Oulu site. The ramp-up had an impact of about 50 million euros in the second quarter.

Inderes analyst Antti Viljakainen said that the ramp-up had a slightly lower-than-expected impact on the second-quarter earnings.

The overall result was "subdued in a rather weak market, but the company has nevertheless managed to defend its profitability reasonably well with growth and cost-cutting measures," Viljakainen said.

"While the ramp-up will continue to weigh on earnings in the short term, we remain confident the Oulu board line will be very cost-competitive and deliver some of the best quality products in the industry," CEO Hans Sohlström said.

The company's adjusted operating profit, or EBIT, fell to 126 million euros ($147.8 million) in the second quarter, above analysts' 122.7 million euro forecast, according to a poll by Vara Research.

Its shares rose 5% in afternoon trading, while domestic peer UPM UPM was up around 2%.

Finland is a major producer and exporter of pulp, paper and other products, thanks to the country's vast forests.

The company said that fiber costs are expected to remain at high levels while market pulp prices should continue to decrease or flatten throughout the summer and into autumn. Some board prices are facing pressure due to low demand, it said.

After Stora Enso reported divestment plans last year in a move to reduce debt, it said in May it would sell 12.4% of its Swedish forest holdings for 900 million euros.

In June, it initiated a strategic review of its Swedish assets, including a potential separation and public listing of the assets through a partial demerger.

Stora Enso said on Wednesday the transaction "reduces its debt and enhances financial flexibility".

($1 = 0.8527 euros)