Finnish-Swedish forest products giant Stora Enso's operating profit slumped by more than half in the last three months of 2019, the firm said on Thursday. Profits were 112 million euros, down from 271 million euros a year earlier.
This marked the fifth consecutive quarter of sliding profits for the company.
"Year 2019 was concluded by a challenging quarter characterised by demanding market conditions, especially significantly lower pulp prices," the company's new CEO, Annica Bresky, said in a statement on Thursday. Last month the Swedish-born Bresky, 44, became the first woman to lead a major publicly listed company in Finland.
The firm says that 2020 also looks challenging. It cites geopolitical uncertainties and warm winter conditions across the Nordic countries, which are undercutting its logistics chain.
"Exceptionally mild winter conditions in the Nordics with reduced period of frozen soil could impact harvesting and transport of wood and may therefore affect the stability of raw material supply and potentially increase wood costs to our Nordic mills," Stora said.
Strike may cost €11m per week
The firm also predicted that an ongoing three-week strike by Finnish paper workers will lower its first-quarter profits by 11 million euros for each week of the strike.
"Positively, we believe the Finland forest strike impact to earnings before interest and taxes (EBIT) is lower than many expected," analysts at Jefferies told Reuters.
A year ago, Stora unveiled a multi-year cost-cutting programme, which it has since accelerated. Last February it said it was aiming at annual savings of 120 million euros, but by autumn it had more than doubled the target to 275 million.
Bresky said that the company managed to shave expenditures by 150 million euros last year, and that the goal should be reached by the end of next year.
Last year Stora said it was closing one production line at its paper mill in Imatra as well as a sawmill in Kitee. Both are in eastern Finland.
Stora's share price was down by nearly three percent on the Helsinki Stock Exchange on Thursday afternoon.