Stora Enso reports sharp decline in Q4 and annual profits

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Stora Enso reports sharp decline in Q4 and annual profits
Credit: © Reuters.

HELSINKI - Finnish pulp and paper manufacturer Stora Enso (OTC: SEOAY ) Oyj experienced significant declines in its fourth-quarter and full-year 2023 financial results, as announced in their latest press release. The company's sales fell by 24% to EUR 2,174 million in the fourth quarter, while operational EBIT plummeted to EUR 51 million, a steep decline from the EUR 355 million reported in the same period the previous year. The operational EBIT margin also dropped to 2.3% from 12.4%.

For the full year, sales were down by 19.6% to EUR 9,396 million, and operational EBIT was EUR 342 million, compared to EUR 1,891 million in 2022. The company's operating result (IFRS) turned negative, posting a loss of EUR -322 million, in contrast to a profit of EUR 2,009 million in the prior year. Earnings per share (EPS) also fell into negative territory at EUR -0.45, compared to EUR 1.97 in 2022.

Stora Enso cited market headwinds, particularly in the Packaging (NYSE: PKG ) and Wood Products divisions, as a key factor impacting the group's performance. Low demand led to decreased deliveries and lower sales prices across most divisions. The company's net debt increased by EUR 1,314 million to EUR 3,167 million, influenced by acquisitions, investments, and dividend payments.

Despite the downturn, Stora Enso completed significant restructuring actions, including site closures and workforce reductions, which are expected to improve operational EBIT by approximately EUR 110 million annually. A new profit improvement program is also underway, targeting an annualized EUR 80 million improvement in operational EBIT and potentially reducing the workforce by approximately 1,000 employees.

The Board of Directors will propose a reduced dividend of EUR 0.10 per share at the Annual General Meeting on March 20, 2024. Additionally, the Board seeks authorization to decide on an additional dividend of up to EUR 0.20 per share at its discretion.

Looking ahead, Stora Enso expects its full-year 2024 operational EBIT to be higher than in 2023. However, the company anticipates continued market uncertainty in 2024, with ongoing pressure on demand, prices, and margins.

This financial summary is based on a press release statement from Stora Enso Oyj.

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