Antti’s comments on the results and analysis update:
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I once again had the opportunity to interview Metsä Board’s Esa 
and his comments on the company’s performance at the end of the year and the operating environment can be viewed on inderesTV. 
Topics:
00:00 Introduction
00:12 Summary of Q4 results
01:17 Release of working capital and financing costs
02:45 Recovery in paperboard demand
03:53 Annual contract negotiations for folding boxboard
04:49 Competitiveness of folding boxboard mills
06:05 Long-term growth assumptions for the paperboard market
08:05 Capacity utilization rates at the Husum mill
09:19 Acquisition of the Winschoten sheeting and distribution center
10:25 Pulp market situation overview
12:02 Decline in wood prices
12:37 Progress of the savings and profit improvement program
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Here is the company report from Antti following Metsä Board’s Q4. 
The company’s short-term outlook remains difficult, although ongoing massive efficiency measures and an at least temporary drop in wood prices are creating a path toward an earnings turnaround. However, we cut our near-term volume forecasts as the market recovery continues to drag, which caused our forecasts for the coming years to drop significantly further. We do not see Metsä Board’s expected return as attractive in the short or medium term, considering that the earnings turnaround will take time at best and the potentially structurally weakened operating environment.
Quote from the report:
Based on our forecasts for 2026 and 2027, Metsä Board’s P/E ratios are 27x and 13x, and the corresponding EV/EBITDA multiples are 9x and 6x. Despite the company’s tolerable debt levels, we recommend that investors look particularly at the P/E ratio for Metsä Board, as the fairly complex group structure complicates the situation regarding EBITDA and EBIT (i.e., EBITDA and EBIT include a share of Metsä Fibre’s net profit and, as a counterweight, a 30% minority interest share of the Husum pulp mill’s result)
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Senior Analyst Henri Parkkinen reviews the situation and future of forest companies in this video.
The earnings season for domestic forest companies appears divided. In the video, Senior Analyst Henri Parkkinen highlights three key factors that investors and those interested in the forest industry’s operating environment should pay attention to in 2026: the pulp market, the development of wood prices, and the impact of exchange rates.
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There was an article in HS (for subscribers) on Sunday about UPM, mainly from a Finnish perspective. Massimo Reynaudo was interviewed.
Probably not much new for those following the company. However, the article is slightly better than the silly headlines suggest (The backbone of Finland’s wealth has collapsed — UPM’s CEO explains what happens to the paper miracle and What will be left for us?).
A few highlights:
Finland’s luck has been that the energy crisis made Germany an expensive country. In recent years, UPM has closed mills and paper machines mainly there.
Last autumn, the company began reporting the figures for the Uruguay and Finland pulp mills separately. It revealed a massive difference in profitability between the south and the north.
The Uruguay mills cook pulp from fast-growing eucalyptus from their own plantations. They make a large profit even when sales prices are at rock bottom.
Finnish softwood pulp mills, on the other hand, made a loss at the end of the year. They have therefore been idled.
Now, the relatively small refinery operating in Lappeenranta is starting to look like a bit of an odd branch at UPM.
Reynaudo assures that it is not. On the contrary, the refinery represents UPM’s new direction, where there are opportunities for growth. Money has been invested in the refinery, and approval is being sought for the aviation fuel it produces.
“The technology we use to make renewable fuels from tall oil is unique. It is a competitive advantage. It involves many valuable innovations and patents that we intend to utilize.”
The refinery was profitable again at the end of the year. The company’s research and development center also operates in Lappeenranta. The idea for chemicals made from wood originated right there.
For now, the figures for biochemicals and biofuels are embedded in “other operations” in the company’s earnings reports. Next year, they will be separated into a new joint unit.
This was also published last week:
I had a summary made (why the author thinks UPM is beating Enso):
UPM has succeeded in turning its strategic choices into cash more efficiently than Stora Enso: better earnings levels and lower indebtedness are reflected in a clear difference in market value. UPM’s investment in the label business has been successful, and it benefits from its own energy production and cheap wood from its own plantations in Uruguay, while Stora Enso suffers from overcapacity in the board markets and expensive pulpwood, and has sold its own hydroelectric plants.
The clickbait headline’s “money machine” refers to this:
UPM’s giant investment in the Uruguay pulp mill was also completed into a gloomy pulp market, but the company gets fast-growing eucalyptus from its own plantations so cheaply that production has still been profitable.
If prices rise at some point, the mill will become quite a money machine. An extra fifty on the price per ton of pulp would mean an earnings improvement of 180–270 million euros.
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Paywall, but here is the final conclusion:
When putting everything together, the most likely candidate to close a pulp mill is perhaps Metsä Group, and the finger would point to Joutseno, but one cannot be certain. Of course, as an operator with a cooperative background, closing facilities is more difficult for Metsä Group than for a pure listed company. Furthermore, Metsä Group is already undergoing a severe cost-cutting and downsizing regimen.
A kind of staring contest is now underway regarding Finnish pulp operations. Who will blink first if other softwood pulp operators in the Baltic Sea region do not take action?
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Local pulp production is emerging in China to challenge imported pulp.
Where will the wood raw material come from?
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China has gained new forest equivalent to twice the size of Finland
For example, China has increased its forest areas by more than 70 million hectares since 1990, according to a recent UN report. This amount is more than twice the total area of Finland.
I don’t know what kind of pulp can be made from those tree species, but perhaps it will be usable since the work has been carried out with the help and guidance of the EU: China plans to plant trees equivalent to the area of Finland, and this is why Europeans want to be involved in the project | World | Yle
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Joutseno’s recovery line is from 1998 and the fiber line from 2001.
At Kaukas, the same are from 1991 and 1996. At least based on Google. At Kaukas, the clock is running out faster.
I would be surprised if Metsä is the first to give up, because the very foundation of the company’s existence is to create demand for wood. But we will have an answer within less than 5 years.
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Suzano is continuing to restrict production this year, just as it did last year, by throttling output by 3.5% or approximately 0.5 million tons, as according to the company, additional tons do not yield sufficient returns. The participation of the market and cost leader in supply restriction efforts may to some extent support pulp price levels or create slight upward pressure, but from the perspective of demand and the demand growth outlook, the move certainly does not paint a good picture. Generally, demand growth is required to fuel a more sustainable and steeper price increase, whereas the leverage of (temporary) supply restriction is smaller, at least in the long term.
Suzano also reported its Q4 results. Lower pulp prices and currencies pushed revenue and EBITDA downward in a year-on-year comparison. I do not have precise information on consensus expectations, but I suspect that at least the direction has been in line with market expectations.
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