Stora Enso is preparing plans for permanent capacity closures to solve cost issues that have made some of its Finnish operations unprofitable.
The company’s announcement came as it posted second quarter pre-tax losses (including non-recurring items – NRI) of €370.6m.
Stora Enso is considering permanent closures “in areas where we cannot see a rapid recovery to clearly positive returns”. It will announce specific plans during the third quarter.
“We have not waited for better times, but instead acted, and that has proved to have been absolutely the right thing to do,” said CEO Jouko Karvinen.
“We will never say we are ready, we have done everything – on the contrary, now we want to move even faster.”
Curtailments, closures and other cost-savings already saved the company €280m year-on-year in the second quarter. And its Next Step programme, unveiled in April, will streamline the organisation and cut overhead costs by a further €250m.
This, it said, was still not enough to solve external cost issues.
Second quarter operating profit (excluding NRI) was €49m, which Stora Enso described as “unacceptably poor”.
The wood products division recorded an operating loss (excluding NRI) of €8.7m from €315.8m sales. First half operating loss was €32.4m from sales of €587.8m.
The company said although demand remained generally weak, a seasonal improvement and tightening of supply supported price increases throughout the product range.
