Finnish forestry firm Stora Enso raised its full-year core profit forecast as it said it expected improved volumes and orders as well as increasing pulp prices.
Stora Enso now expects adjusted earnings before interest and taxes (EBIT) to rise by at least 50% this year, from €342 million ($370 million) in 2023, it said. Earlier in the year, it said it expected a rise of between 15% and 50%.
'Pulp prices continue to increase, and the outlook for the rest of this year is stronger than previously estimated,' the company said in a statement, adding it also saw growing demand for consumer board.
Although Stora Enso cited the 'successful implementation' of a profit improvement plan targeting a reduction of about 1,000 jobs, it also warned that market uncertainties, such as inflationary pressure or strikes, could continue in 2024.
'An Incremental Positive'
'Commentary regarding improved demand for consumer board and a more positive price outlook for consumer board and containerboard is an incremental positive', JP Morgan said.
Both Stora Enso and its Finnish competitor UPM-Kymmene faced growing inflation costs, de-stocking by customers and tepid pulp demand in 2023, which weighed on profits.
The companies had also cited uncertainties in the global economy hitting market conditions, while in March they struggled with the impact from strikes in Finland.
Elsewhere, prices across almost every flexible packaging material posted modest price rises in the first quarter of 2024, compared with the end of 2023, mainly due to disruptions in the supply of resin and film, according to Flexible Packaging Europe, the association that represents the European flexible packaging industry.
