English Finnish
Published: 2011-11-02 11:01:00 CET
Metsäliitto Osuuskunta
Interim report (Q1 and Q3)

Metsäliitto Group Interim Report 1-9/2011

Metsäliitto Group Interim Report 1–9/2011, Stock Exhange Release 2 November 2011 at noon


Metsäliitto Group’s operating result excluding non-recurring items was EUR 311 million


Result for January–September 2011
– Sales amounted to EUR 4,123 million (1––9/2010: EUR 3,986 million).
– Operating result excluding non-recurring items was EUR 311 million (405). Operating result including non-recurring items was EUR 229 million (415).
– Result before taxes and excluding non-recurring items was EUR 217 million (299). Including non-recurring items, the result before taxes was EUR 130 million (293).


Result for July–September 2011
– Sales amounted to EUR 1,317 million (7–9/2010: EUR 1,345 million).
– Operating result excluding non-recurring items was EUR 63 million (155). Operating result including non-recurring items was EUR 44 million (170).
– Result before taxes and excluding non-recurring items was EUR 35 million (114). Including non-recurring items, the result before taxes was EUR 17 million (128).


Events in the third quarter of 2011
– Metsä Tissue's Düren mill was inaugurated on 14 September 2011.
– Metsäliitto Cooperative's shareholding in Metsä Tissue increased from 70.5 per cent to 76.6 per cent.
– The divestment of M-real's Hallein pulp mill was completed on 1 September 2011.


Events after the period
M-real announced it would start negotiations on closing the Alizay mill and on discontinuing the unprofitable operations at the Gohrsmühle mill.
M-real announced plans to restructure its coated paper business, including closure of Äänekoski paper mill and increase of Husum mill’s production.


“The result development in the third quarter was in accordance with the guidance we provided. In addition to the economic uncertainty and weakened situation in the paper and pulp market also the costs for closing down the mills and annual maintenance shutdowns affected our operating result.
If realised, our plans concerning the paper business in Alizay, Gohrsmühle and Äänekoski will further M-real’s focus in cartonboard for which the demand outlook is good. The launch of the operations at Metsä Tissue's Düren mill in Germany strengthens our position as a significant European manufacturer of baking and cooking papers.”

Kari Jordan, President & CEO, Metsäliitto Group



Key figures


Metsäliitto Group

Income statement
(Continuing operations)
2011
1–9
2010
1–9
2011
7–9
2010
7–9
2010
1–12
Sales 4 123 3 986 1 317 1 345 5 377
  Other operating income 64 98 14 51 142
  Operating expenses -3 692 -3 461 -1 210 -1 157 -4 686
  Depreciation and impairment losses -265 -207 -76 -70 -336
Operating result 229 415 44 170 497
  Share of results in associates 5 -14 2 -1 -15
 Exchange gains and losses 2 -6 1 -6 -7
  Other net financial items -106 -103 -31 -35 -129
Result before income tax 130 293 17 128 345
  Income taxes -81 -102 -21 -39 -131
Result from continuing operations 50 191 -4 89 214



Metsäliitto Group

Profitability
(Continuing operations)
2011
1–9
2010
1–9
2011
7–9
2010
7–9
2010
1–12
Operating result, EUR mill. 229 415 44 170 497
   - “ -, excluding non-recurring items 311 405 63 155 547
   - “ - % of sales 7.6 10.2 4.8 11.5 10.2
Return on capital employed, % 8.0 13.1 4.9 16.6 11.8
   - ” -, excluding non-recurring items 10.9 13.3 6.7 15.2 13.4
Return on equity, % 3.9 16.9 -0.9 22.4 13.9
   - ” -, excluding non-recurring items 10.8 17.4 3.4 18.8 18.2
           
Financial position 2011
30.9
2010
30.9
2011
30.6
2010
30.6
2010
31.12
Equity ratio, % 31.0 28.1 30.9 27.6 29.7
Net gearing ratio, % 113 123 121 135 116
Interest-bearing net liabilities, EUR mill. 1 895 1 985 2 051 2 109 1 939



Business Areas

Sales and Operating result
January–September 2011
(EUR mill.)
 
Wood
Supply
Wood
Products
Industry
 
Pulp
Industry
Board and
Paper
Industry
Tissue and
Cooking
Papers
Sales 1 121 720 1 011 1 961 725
 Other operating income 6 4 11 47 7
 Operating expenses -1 107 -687 -732 -1 859 -685
 Depreciation & impairment losses -2 -25 -48 -148 -30
Operating result 18 12 242 1 17
  Non-recurring items - 0 4 80 -
Operating result, excl. non-rec. items 18 12 246 81 17
- % of sales 1.6 1.6 24.4 4.1 2.3



Near-term outlook
The rainy autumn season has slowed down harvesting and made deliveries difficult. Nevertheless, the supply of wood to Metsäliitto Group's production plants has been successful. All timber types are still being purchased from privately owned forests, with the focus being on stands marked and suitable for summer felling until the freezing weather. 

Pressures on prices of sawn timber, in particular, will have a negative impact on the result outlook of Wood Products Industry in the last quarter of the year. Adapting sawmill operations in order to safeguard financially sustainable development will be necessary.

In the last quarter of the year, Metsä-Botnia's utilisation rate will be slightly lower than normal due to the upcoming annual maintenance shutdowns. The annual maintenance shutdowns in Joutseno, Kemi and Äänekoski took place in August–October, and the shutdown at the Rauma mill will take place in November.

No signs of weakness have been observed in the end demand for cartonboard. Delivery volumes were at a record high level at the end of last year and at the beginning of this year. Nevertheless, inventory levels have been clearly reduced in recent months in different parts of the supply chain as the general economic situation has become more uncertain and producers' ability to supply materials has improved. The long-term demand and profitability outlook for cartonboard will continue to be strong, and the inventory levels are estimated to normalize during the next few months.

Improving the operating result and increasing the sales of own brands will be Metsä Tissue's goals for the remainder of the year. Furthermore, the company's investments into successful completion of strategic development projects will continue.

The economic uncertainty has weakened the situation in the paper and pulp market and in the sawmill industry in all main markets in recent months. Order books are currently below the normal level and production curtailments will be carried out at most mills during the remainder of the year.

Metsäliitto Group's operating result excluding non-recurring items in the last quarter of 2011 is estimated to be slightly lower than in the third quarter.


New disclosure procedure
Metsäliitto Group has adopted a new disclosure procedure made possible by the Financial Supervision Authority Standard 5.2b. This report is a summary of Metsäliitto Group's Interim Report for January–September 2011. The Interim Report and its tables are attached to this Stock Exchange Release as a PDF attachment and are available on the Metsäliitto Group website at www.metsäliitto.fi.



Further information:
Vesa-Pekka Takala, Group CFO, Metsäliitto Group, tel. +358 10 465 4260
Anne-Mari Achrén, Group CCO, Metsäliitto Group, tel. +358 10 465 4541


Metsaliitto_Group_Q3_2011.pdf