Metsä Group has said demand for tissue paper products is expected to remain stable and the long-term growth will remain moderate, as it reports its first quarter results.
Sales for the quarter were €1,358m, down from €1,642m recorded in the first quarter of 2025. Operating result was a loss of €18m, down from €51m a year earlier.
The comparable operating result was a loss of €4m, down from €81m.
During the first quarter, the company said demand for market pulp was “muted” in Europe and China.
At the end of the period, a market-driven shutdown began at the company’s Joutseno pulp mill in Lappeenranta, Finland, and it confirmed the shutdown will continue for the time being.
Average invoicing prices for softwood market pulp decreased by 4% in Europe and increased by 2% in China compared with the previous quarter.
Metsä Group also noted the rise in oil and natural gas prices caused by the conflict in the Middle East, which it said is putting upward pressure across logistics and raw material costs.
The company’s tissue paper business was reorganised and change negotiations were concluded in March, resulting in a reduction of 50 jobs.
President and Chief Executive Jussi Vanhanen said: “Metsä Group’s first-quarter result improved significantly compared with the second half of 2025, but the comparable operating result showed a loss of €3.8m (Q4 2025: €-57m).
“The improvement resulted from a broad-based cost-cutting initiative. Costs fell across the board: fixed costs, raw materials, wood costs, and other variable costs alike.
“The €300m profit improvement and cost savings programme we launched in the autumn of 2025 is proceeding on schedule.”
“In the short term, our positive result development is threatened by rising logistics and raw material costs resulting from the closure of the Strait of Hormuz.
“We have begun to pass on the increased costs to our selling prices, but there is typically a certain delay before the impact is felt. This further underscores the need to continue curbing other cost factors.”
Near-term outlook
He added that geopolitical tensions and conflicts are increasing uncertainty in the global economy and driving up energy, chemical and logistics costs.
“Rising costs increase production costs, which puts pressure on profitability. Low consumer confidence, the partial replacement of softwood pulp with hardwood pulp, and a structural decline in demand for printing and writing paper are weakening the demand for market softwood pulp.
“At the same time, the supply of softwood market pulp is being reduced by the capacity shutdowns that continued in North America early this year and by production curtailments in the industry.
“Consumers’ cautious purchasing behaviour also has a general impact on demand for packaging and weakens the predictability of paperboard sales.”
However, he added that demand for tissue paper products “is expected to remain stable” and the long-term growth to “remain moderate.”
