Metsa Group Half-Year Report 2024

President and CEO Ilkka Hämälä: The first half of 2024 was financially very weak for Metsä Group. This was due to lower year-over-year sales prices, especially in pulp and paperboard, and the continued increase in wood costs. In the review period, political strikes caused a loss of EUR 60 million in operating profit. The gas explosion at the Kemi bioproduct mill’s evaporation plant reduced comparable operating profit by approximately EUR 100 million before insurance compensation. Despite the gloomy figures, positive development is seen in many of our businesses. In Europe, the pulp market was strong in the second quarter, and the price level is increasing. Demand for fresh fibre paperboards in 2024 has clearly improved from last year’s record low levels. Despite the continued weak situation in the construction industry, Kerto® LVL has been at a stable and good level in terms of both price and demand. The profitability of tissue papers continues to be reasonable, but raw material prices have a significant impact on the level of results. Of all our product groups, the weak cycle now only continues in sawn timber and spruce plywood, which are directly hit by the construction industry’s muted sentiment.

Highlights, events during the second quarter of 2024:

• The average sales prices of Metsä Group’s long-fibre pulp increased from the previous quarter in Europe and China.
• Demand for softwood market pulp has been strong in Europe and North America. In China, purchasing activity weakened in market pulp.
• The demand for and prices of Metsä Group’s paperboards remained stable compared to the previous quarter. Delivery volumes increased slightly.
• The Kemi bioproduct mill returned online in June after the damage resulting from the gas explosion at the evaporation plant had been repaired.
• In April, Metsä Board made an investment decision on the renewal of the Simpele board machine.
• On 13 May 2024, Metsä Group completed a transaction with which the ownership of the Group’s Russian subsidiaries were transferred to the VLP Group. In 2022, Metsä Group discontinued its business operations in Russia, including the Metsä Svir sawmill, wood supply and paperboard sales. After the transaction was completed in May, the Group no longer owns anything in Russia. The transaction had a total impact of EUR 13.8 million on the operating result of financial reporting period.