Koskinen’s result barely managed to win – “Construction recovery slower than expected”

Wood processing company I will reported on its third quarter result.

The company’s net sales increased to 68.7 million euros from 55.0 million euros in the comparison period, and operating profit to 0.4 million euros from a loss of 1 million euros a year ago. The comparison period was exceptionally weak for the company.

The company’s EBITDA rose to 3.6 million euros in the quarter from 1.3 million euros a year ago. Earnings per share were minus 0.02 euros, but improved from -0.04 euros a year ago.

The three analysts following the company expected the company’s turnover to rise to an average of 70.5 million euros in July–September. The operating result, on the other hand, was predicted to have contributed 3.2 million euros to the profit.

The company has been disciplined at least by the weak market and the high prices of raw materials, i.e. logs.

The company kept the profit guidance for this year unchanged. Koskisen Group’s turnover in 2024 is expected to increase from the level of 2023. The adjusted EBITDA margin is expected to be 8–12 percent.

Profitability decreased in the record industry

“While the uncertainty of the operating environment continues, the level of results achieved is satisfactory,” commented the company’s CEO Jukka Pahta in the bulletin.

“Especially the recovery of construction has been slower than expected. The summer shutdowns were held as planned in July-August, which was seasonally reflected in the third quarter’s production volumes and turnover.”

The profitability of the sawmill business improved compared to the comparison period, with an EBITDA of 1.7 million euros. Profitability was improved by increased delivery volumes and a higher price level for sawn timber than in the comparison period.

“There has been no significant change in the demand situation in the sawmill industry as a whole, even though the demand picked up a little domestically. Lumber stocks in both industry and Koski were at a low level.”

Delivery prices of softwood logs continued to rise sharply, which challenges the profitability of the sawmill industry. According to the company, in wood procurement, the raw material reserves and warehouses were at a good level and the raw material supply went as planned.

The profitability of the record industry weakened compared to the comparison period, with EBITDA being 1.8 (2.6) million euros, mainly due to increased raw material costs.

“The market situation for birch plywood was good after the summer, but it weakened towards the end of the quarter as the continued weak economic situation in Central Europe was reflected in the market demand for board products. The aim is now to systematically optimize the stock levels of board products to meet the demand at different stages of the value chain.”