Forestry firm Stora Enso lifts 2024 outlook as orders, prices rise
Adds shares in lead, comment in paragraph 5, context in paragraphs 6-7
May 15 (Reuters) -Finnish forestry firm Stora Enso STERV.HE raised its full-year core profit forecast on Wednesday, lifting its shares by 3%, as it said it expected improved volumes and orders as well as increasing pulp prices.
Stora Enso said it now expects adjusted earnings before interest and taxes (EBIT) to rise by at least 50% this year, from 342 million euros ($370 million) in 2023. Earlier in the year it said it expected a rise of between 15% and 50%.
"Pulp prices continue to increase, and the outlook for the rest of this year is stronger than previously estimated," the company said in a statement, adding it also saw growing demand for consumer board.
Although Stora Enso cited the "successful implementation" of a profit improvement plan targeting a reduction of about 1,000 jobs, it also warned that market uncertainties, such as inflationary pressure or strikes, could continue in 2024.
"Commentary regarding improved demand for consumer board and a more positive price outlook for consumer board and containerboard is an incremental positive", JP Morgan said.
Both Stora Enso and its Finnish competitor UPM-Kymmene UPM.HE faced growing inflation costs, destocking by customers and tepid pulp demand in 2023, which weighed on profits.
The companies had also cited uncertainties in the global economy hitting market conditions, while in March they struggled with the impact from strikes in Finland.
($1 = 0.9231 euros)
Reporting by Boleslaw Lasocki; Editing by Alexander Smith
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