Stora Enso warns soaring energy costs will hurt Q4 packaging profits

Credit: REUTERS/Ints Kalnins

By Boleslaw Lasocki

Oct 21 (Reuters) - Stora Enso STERV.HE warned on Friday that fourth-quarter profits in the packaging business, its biggest by sales, would be hurt by soaring energy costs as the Finnish forestry firm reported better-than-expected third-quarter operating profit.

Operational earnings before interest and tax (EBIT) in the third quarter were 527 million euros ($515 million), it said, beating the 465.3 million euros expected in a company-provided estimate.

"Looking ahead, we see the first signs of potential macroeconomic slowdown that could eventually also impact our business," Chief Executive Annika Bresky said in a statement.

However, Stora Enso kept its guidance for 2022 operational EBIT to rise year on year.

In a separate statement, the company said it would invest about 1 billion euros to convert another paper machine at its site in Oulu, Finland, to make consumer board in a further move to expand its packaging business.

This is its third paper-to-packaging conversion since 2016.

In recent years, Stora Enso has increased its focus on its packaging materials division after deciding to sell four out of its five paper mills, which it said were no longer profitable.

In September, it bought a Dutch packaging company to increase its corrugated packaging capacity.

($1=1.0242 euros)

(Reporting by Boleslaw Lasocki Editing by Josephine Mason and Mark Potter)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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