#Finland #Helsinki #Q4 2024 #Stora Enso #impairments

Stora Enso's Impairment Results for the Fourth Quarter of 2024

In a recent announcement, Stora Enso Oyj revealed it would report non-cash impairments amounting to approximately EUR 724 million in its IFRS operating results for the fourth quarter of 2024. This decision comes amidst revised long-term cash flow estimates and is expected to impact the company's net result significantly.

The impairments are attributed to various factors, including lower sales prices, escalating costs, and an unfavorable supply-demand environment compared to previous assessments. Stora Enso's allocation of these impairments across its divisions reflects the strategic challenges faced in different operational segments:


The primary focus of the impairments within the Packaging Materials division pertains to operations at the Beihai facility in China and its containerboard segment. For Packaging Solutions, the impairments affect operations based in Western Europe, while the Wood Products division's challenges stem from Northern Europe's market dynamics.

With the projected impairments, Stora Enso anticipates a net impact of approximately EUR 668 million, after considering a positive tax effect estimated at EUR 56 million. Yet, the company reassured stakeholders that the impairments would not affect its full-year 2024 adjusted EBIT guidance.

The implications of these impairment charges are notably significant. Stora Enso estimates that it will see a reduction in annual depreciation by around EUR 37 million moving forward, indicative of the company’s proactive approach to reshaping its financial strategies despite market challenges.

The decision to mark down these impairments revolves around a five-year forecast framework that now suggests less optimism regarding cash flows when compared to earlier predictions. As Stora Enso operates as a leading player in the bioeconomy, providing renewable products in packaging, biomaterials, and wooden construction, the need for refined financial forecasts has never been more critical.

Stora Enso employs approximately 20,000 individuals and reported sales of EUR 9.4 billion in 2023, underscoring its status among the world’s largest private forest owners. Its shares are publicly traded on Nasdaq Helsinki Oy and Nasdaq Stockholm AB, further highlighting the company's enduring presence in global markets.

As the situation evolves, Stora Enso remains committed to navigating the complexities of its operational landscape, ensuring that it continues to provide innovative and sustainable solutions that meet the needs of its stakeholders and the market at large. This development serves as a potent reminder of the market's volatility and the necessity for corporate adaptability in the face of changing economic conditions.