Major Finnish forest industry companies have reported declining second-quarter (Q2) profits this week, as the sector continues to face headwinds from geopolitical tensions and market volatility fuelled by tariff uncertainty, reported Xinhua.
The recent depreciation of the U.S. dollar has added further pressure to international operations.
Finnish forestry giant UPM Corporation announced on Thursday that its Q2 sales fell to 2.4 billion euros, down from both the previous quarter and the same period in 2024. Comparable operating profit declined to 126 million euros, marking a 31 percent drop year-on-year. The company also revealed plans to close a paper mill in eastern Finland.
Stora Enso, another leading Finnish forest industry firm, reported Wednesday a Q2 profit of 126 million euros, down by 18 percent from 153 million euros a year earlier. However, its sales rose slightly to 2.43 billion euros from 2.30 billion in the same period of 2024.
The third major player in the sector, Metsa Group, is expected to publish its second-quarter results next week but has already issued a profit warning.
Hans Sohlstrom, president and CEO of Stora Enso, cautioned that challenging conditions are likely to persist: "Subdued and volatile market demand is expected to continue through the remainder of 2025, driven by macroeconomic and geopolitical uncertainty." He added that market pulp prices are expected to decrease or level off over the summer and autumn, while some board products face pricing pressure due to weak demand.
UPM president and CEO Massimo Reynaudo emphasized the impact of global trade tensions and currency fluctuations. "The U.S. tariff policy and following reactions have caused uncertainty in global trade, weakening demand," Reynaudo said, noting that the U.S. dollar has also continued to depreciate. "These developments negatively affected our pulp and communication paper businesses."
In addition to international pressures, Finnish forest companies are still affected by the cessation of wood imports from Russia, which began several years ago.
A July 9 editorial in the Finnish language business daily Kauppalehti noted that the end of Russian imports has tightened the wood market across the Baltic region, driving prices up. Reynaudo echoed the concern, describing raw wood prices in the region as "unsustainably high."
Looking ahead, the industry also faces uncertainty stemming from climate policy.
The Finnish Climate Change Panel recently concluded that to meet the European Union's goal of reducing emissions by 90 percent by 2040, Finland would need to significantly reduce forest harvesting. As this poses political challenges, the Finnish government is instead focusing on increasing forest growth and expanding forest areas to enhance carbon sink capacity.
However, recent studies indicate that Finland's forests — once seen as reliable carbon sinks — have become net carbon sources.
Forestry is a cornerstone of Finland's economy, contributing approximately 4-5 percent of national gross domestic product (GDP) and around 20 percent of total goods exports. Official data shows the sector directly employs about 41,000 people and supports over 100,000 jobs when indirect employment is included.
- Forest sector
- Profit
- Slumps
Source: www.dailyfinland.fi
