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Raw material costs eat into Metsä Tissue’s profit

Feb 11 2011  Metsä Tissue reports increased sales 2010, but the profit was down, mainly due to increasing raw material costs.

Metsä Tissue’s sales for January-December 2010 totalled 938 million Euros (890 million 2009), with operating profit excluding non-recurring items amounting to 59 million Euros (93). The operating profit was affected by various factors, one being a sharp peak in variable costs. This applied particularly to escalating raw material prices. Pulp prices climbed 40 percent on average, and recovered paper prices in Central and Eastern Europe were as much as double those charged last year, Metsä Tissue writes in its year-end report.Metsä Tissue's sales 2010 were up approximately five percent on the previous year as a result of higher sales volumes (up twp percent), favourable exchange rates and price increases. Sales of Metsä Tissue’s own brands increased nine per ent on the previous year, most notably with Lambi, Katrin and Serla showing gratifying growth in demand.Two strategic development programs were launched during the year. One was related to the deal with M-real concerning the acquisition of PM5 at the Düren plant in Germany. The deal was finalized in November. With production and converting now located closer to key markets, product availability will improve. The second strategic program is designed to strengthen and upgrade the efficiency of Metsä Tissue's Polish operations.

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