Metsä Group improved its profitability in the third quarter of 2026, supported by lower costs, stronger performance in its paperboard business and progress in its cost-saving program. However, lower sales, subdued pulp demand, production shutdowns and higher energy and logistics costs continued to weigh on performance.
The Finnish forest industry group reported sales of €1,267 million for July–September, down from €1,440 million in the same period of 2025. Comparable EBITDA increased to €100 million from €39 million, while the comparable operating loss narrowed to €4 million, compared with a loss of €72 million a year earlier.
The operating loss was €41 million, against €69 million in Q3 2025, while the loss for the period narrowed to €51 million from €70 million. Net cash flow from operations amounted to €128 million, compared with €207 million in the previous-year period.
According to President and CEO Jussi Vanhanen, the improvement came despite an unstable geopolitical situation that weakened demand and increased costs. He noted that profitability across all the Group's business operations remained well below targets.
The Group's €300 million cost savings and profit improvement program, launched in July 2025, had generated a €200 million profit impact by the beginning of Q4, ahead of schedule.
However, Vanhanen said weak demand, exchange rates and rising costs continued to limit the benefits of the savings programme. In particular, higher oil and diesel prices resulting from the conflict in the Middle East reduced the Group's Q3 result by approximately €47 million.
Metsä Board returns to operating profit
Metsä Board recorded sales of €402.3 million in Q3, down from €441.2 million a year earlier. Comparable EBITDA improved to €30.1 million from a loss of €18.2 million, while the comparable operating result reached a profit of €5.5 million, compared with a loss of €45.6 million in Q3 2025.
The improvement marked the fourth consecutive quarter of higher comparable operating results.
Paperboard delivery volumes remained stable compared with the previous quarter, while average selling prices increased slightly. Demand at the Finnish paperboard mills was good, with stronger order books supporting higher operating rates.
The market balance also improved following capacity reductions across the folding boxboard and solid bleached sulfate (SBS) markets. During the earnings call, management estimated that around one million tonnes of capacity had been adjusted year on year across these markets, roughly half in the US and half in Europe. These changes improved the supply-demand balance and supported pricing.
Metsä Board's share of the European folding boxboard market increased to 29% in September, from 25% at the end of Q2, according to CEO Esa Kaikkonen. White kraftliner deliveries also benefited from improved market conditions, with year-to-date volumes increasing by 7%.
However, major annual maintenance shutdowns and a prolonged market-related production shutdown at Husum in July reduced production volumes. Operating rates at Husum remained low, and the mill complex continued to be loss-making despite measures taken to improve performance.
Management highlighted food and pharmaceutical packaging as key focus segments for its commercial development in Europe and the US.
Lower wood and chemical costs, reduced fixed costs and savings from the transformation programme supported profitability. The company also benefited from approximately €10 million in tariff refunds, which helped offset high logistics costs.
By the end of September, Metsä Board's transformation programme had achieved an annualised EBITDA improvement run rate of €148 million, of which approximately €99 million had already been reflected in reported EBITDA.
Metsä Fibre remains under pressure from weak pulp markets
Metsä Fibre's performance continued to be affected by subdued market pulp demand and prices, as well as production constraints. Its comparable operating loss narrowed to €18.7 million in Q3, compared with €75.7 million a year earlier.
Sales declined to €579.9 million from €633.0 million in Q3 2025. Comparable EBITDA improved to €33.9 million from a loss of €14.1 million, while the operating loss narrowed to €35.3 million from €67.7 million.
Pulp deliveries decreased to 686,000 tonnes from 735,000 tonnes, while sawn timber deliveries increased slightly to 364,000 cubic metres from 361,000 cubic metres.
Softwood pulp prices remained under pressure.
According to the detailed segment report, invoicing prices decreased by 1% in Europe and 2% in China compared with Q2.
Demand for softwood market pulp remained below both the previous year's level and the long-term average, reflecting weak demand for end products, structural declines in printing and writing paper consumption and the partial substitution of softwood pulp with hardwood pulp in various products.
Production was affected by the continued market-related shutdown of the Joutseno mill, which began in March 2026, as well as annual maintenance shutdowns at the Äänekoski bioproduct mill and Rauma pulp mill. These shutdowns reduced production volumes during the review period.
Lower wood raw material costs and fixed-cost savings from the Group's improvement programme helped mitigate the impact of weaker pulp prices and lower production volumes.
Metsä Group expects Metsä Fibre's result to improve in Q4 compared with the third quarter.
Metsä Tissue increases deliveries but reports lower profitability
Metsä Tissue recorded sales of €286.5 million in Q3, compared with €279.6 million in the same period last year. Tissue paper deliveries increased by 8% to 125,000 tonnes, from 115,000 tonnes.
Despite higher sales and delivery volumes, profitability declined. Comparable EBITDA decreased to €27.4 million from €32.8 million, while the comparable operating result fell to €10.2 million from €20.7 million. The reported operating result was €9.3 million, compared with €20.7 million in Q3 2025. The comparable operating margin consequently decreased to 3.6% from 7.4%.
Average sales prices were 5% lower year on year. Rising energy, oil-based raw material and transport costs eroded profitability, while competitive pressures prevented the company from increasing selling prices sufficiently to offset the higher costs.
Metsä Tissue's efficiency improvement and cost-saving measures continued as planned, supporting profitability in a challenging operating environment. The company also reported that tissue and greaseproof paper sales volumes continued to grow during the quarter.
Outlook
Metsä Group expects geopolitical tensions to continue driving uncertainty and putting upward pressure on energy, logistics and chemical costs.
The outlook for softwood market pulp demand remains subdued, although production cuts and capacity closures are expected to gradually improve market balance. The paperboard market balance has improved, supporting the pricing environment, while demand for tissue and greaseproof paper products is expected to grow steadily.
For Metsä Board, paperboard delivery volumes are expected to decrease seasonally in Q4, although previously implemented price increases are expected to support profitability. Energy costs are expected to increase, while maintenance costs should decrease compared with Q3.
Beyond its operating performance, Metsä Group announced a €25 million investment in a new Muoto fibre-based packaging production line in Äänekoski, scheduled to start operations in 2028.
The Group was also awarded €21 million in investment aid from Finland's Ministry of Economic Affairs and Employment for its planned wood-based carbon dioxide capture plant at the Rauma pulp mill. The project would capture biogenic CO₂ from the mill's recovery boiler, with a planned capacity of 100,000 tonnes per year. A final investment decision could be made in early 2027 at the earliest and remains subject to an environmental permit, completion of engineering work and sufficient market demand. The aid will only be paid if the investment proceeds.
At the same time, Metsä Group abandoned its plans for a Kuura textile fibre mill in Kemi, citing the lack of conditions for establishing a commercially viable business. The decision was influenced by global oversupply of wood-based textile fibres and insufficient demand for higher-priced sustainably produced fibres.
