the quarter, we have made a step change
in our transformation towards a renewable materials growth company. I am
very pleased to announce the third consecutive quarter of sales growth, with an
increase of almost 5%. This is mainly driven by our steady progress in the transformation projects in China,
Varkaus and Murów. Additionally, a favourable price development had a
positive impact. If we look at sales excluding the paper business, it increased
Operational EBIT increased over 32% to EUR 290 million, primarily due to
favourable sales prices, increased volumes from strategic investments and
efficient cost control. The balance sheet continued to strengthen, as net debt
to operational EBITDA improved to 1.8 (2.1).
The transformation projects continue to
deliver and contribute to solidifying our position in the bioeconomy. The
ramp-up of Beihai Mill remains ahead of plan with a production volume of 105
000 (52 000) tonnes of consumer packaging board during the quarter. I am also
satisfied that we have reached our targeted operational EBITDA run-rate for the
Varkaus kraftliner mill. We expect full production in the fourth quarter this
year. Another positive development is the turnaround in China Packaging, where
we have seen increased deliveries coupled with operational improvements.
Today, we are happy to announce two important investments in Finland. We
continue to invest in Finland, while expecting that the competitiveness of its
export industry is ensured and further improved globally.
We will invest EUR 52 million to increase our total dissolving pulp capacity,
from 150 000 tonnes to 430 000 tonnes annually at Enocell Mill. Our
dissolving pulp is used in the production of viscose fibres for the textile
industry. It is a renewable raw material
which can replace fossil-based products, such as polyester.
We will also invest EUR 42 million to enhance our chemi-thermomechanical pulp
(CTMP) annual production volume and drying capacity at Imatra Mills. This will
boost our competitiveness in the liquid packaging board and food service board
segments. It will also enable us to take the next steps in the
commercialisation of micro-fibrillated cellulose (MFC). MFC can be used for lighter, more durable packaging that requires less
raw material. The investments will support our competitiveness and
contribute to sustainable growth.
I am proud that we have been top ranked in a study by Mistra Center for
Sustainable Markets at the Stockholm School of Economics. The study explored
how Sweden’s largest companies communicate their sustainability aspirations,
implementation and evaluation.
As always, I would like to thank our customers for their business, our
employees for their dedication, and our investors for their trust.”
sales are estimated to be similar to or slightly higher than the amount of EUR
2 509 million recorded in the third quarter, and operational EBIT is expected
to be somewhat lower than or even in line with the EUR 290 million recorded in
Q3/2017. The operational EBIT estimate for Q4/2017 includes the negative EUR 7
million impact of the ramp-up of the Beihai operations.
As earlier announced, the Beihai Mill is expected to reach operational
EBITDA-breakeven during Q4/2017. The impact of annual maintenance shutdowns is
expected to be approximately EUR 10 million higher than in Q3/2017, and it is
included in the above guidance.