Metsä Board (METSB) Q3 2024 earnings summary

Executive summary

• Q3 2024 paperboard volumes increased 14% year-over-year and prices remained stable, with production recovering from prior disruptions and maintenance shutdowns.

• Market pulp deliveries decreased in Q3, especially to China, while insurance compensation of EUR 23 million was recognized for the Kemi mill explosion.

• Dividend policy was updated to target at least half of annual result, and investments in capacity and sustainability continued.

• Profitability improved in Q3 due to insurance compensation, but year-to-date results remain below 2023 levels.

• Net cash flow from operations was negative year-to-date, impacted by lower dividends and increased working capital.

Financial highlights

• Q3 2024 sales were EUR 499 million, up 4% year-over-year; year-to-date sales were just under EUR 1.5 billion, down 2% from 2023.

• Q3 comparable operating result was EUR 41.9 million (8.4% margin), up from EUR 5.5 million (1.1%) in Q3 2023; year-to-date operating result was EUR 73 million (4.9% margin), down from EUR 121 million (8.0%).

• Q3 2024 EPS was EUR 0.08, up from EUR 0.01 in Q3 2023; year-to-date EPS was EUR 0.09, down from EUR 0.26.

• Net debt at end Q3 2024 was EUR 348–350 million, highest in five years; leverage at 2.0, below the 2.5 target.

• Free cash flow was negative EUR 25 million; net cash flow from operations for Jan–Sep was -EUR 11.9 million.

Outlook and guidance

• Paperboard delivery volumes are expected to decrease slightly in Q4 2024 due to seasonality; average sales prices to remain stable.

• Total costs excluding pulp are expected to rise, especially wood and fixed costs; maintenance costs to drop, providing at least EUR 10 million positive impact.

• Comparable operating result for Q4 2024 is expected to be weaker than Q3 2024; insurance compensation for Q4 not included in guidance.

• Market pulp demand in Europe and North America expected to remain stable; China demand normalized after weak Q3.