Stora Enso reports a 27% increase in adjusted EBIT for Q2 2026 despite stable sales, driven by strict cost management, portfolio strategy, and the Oulu ramp-up.
- Stora Enso's adjusted EBIT for Q2 2026 rose 26.8% year-on-year to EUR 160 million, while sales remained stable at EUR 2,423 million.
- The company is advancing strategic portfolio changes, including the planned separation of its Swedish forest assets by H1 2027 and a EUR 19 million fluff pulp investment in Skutskär.
- Revenue from CO₂ emission rights is projected to drop significantly to EUR 10–20 million in 2026 due to updated EU ETS rules for biogenic emissions.
Financial Results: Q2 and H1 2026 Performance Overview
Stora Enso Oyj has released its half-year report for 2026, highlighting operational improvements and disciplined cost execution amid persistent market volatility. In the second quarter of 2026, sales were virtually unchanged year-on-year at EUR 2,423 million (compared to EUR 2,426 million in Q2 2025). Positive contributions from structural adjustments were offset by lower market prices and unfavorable currency fluctuations. For the first half of 2026, group sales totaled EUR 4,781 million (down from EUR 4,789 million in H1 2025).
Despite flat top-line growth, adjusted EBIT for Q2 2026 grew by 26.8% to EUR 160 million (up from EUR 126 million in Q2 2025), expanding the adjusted EBIT margin to 6.6% (vs. 5.2%). For the January–June period, adjusted EBIT reached EUR 319 million (compared to EUR 301 million in H1 2025). Operating result under IFRS for Q2 stood at EUR 16 million (down from EUR 64 million in Q2 2025), impacted by EUR -83 million in items affecting comparability—primarily impairments and restructuring costs—and EUR -61 million in fair value adjustments of biological assets.
Earnings per share (EPS) basic for Q2 2026 were EUR -0.03 (EUR 0.03 excluding fair valuation adjustments). Operating cash flow amounted to EUR 87 million, affected by a negative working capital impact of EUR 101 million due to higher trade receivables from stronger consumer packaging sales. Meanwhile, the net debt to adjusted EBITDA ratio improved significantly to 2.2 (down from 3.3 in Q2 2025), helped by a reduction in net debt following the classification of hybrid bond proceeds as equity.
Strategic Portfolio Optimization and Targeted Investments
Stora Enso continues to reshape its operational footprint to focus capital on higher-margin, growth-oriented market segments:
- Separation of Swedish Forest Assets: Preparations remain on track to carve out its Swedish forest business (Bergslagets Skogar) into a separate publicly listed company, with completion expected in the first half of 2027. The total valuation of the group's forest assets stood at EUR 8.5 billion (EUR 10.80 per share).
- Fluff Pulp Expansion at Skutskär: The company is investing EUR 19 million to boost specialized fluff pulp capacity at its Skutskär mill in Sweden to meet growing hygiene product demand. As part of this realignment, softwood pulp production on fiberline 3 will be permanently closed in Q3 2026.
- Oulu Mill Ramp-Up: The ramp-up of the new consumer board line at the Oulu site in Finland is progressing, with production volumes gradually increasing toward full capacity by 2027.
- Divestments and Reviews: In July 2026, Stora Enso completed the divestment of its German corrugated board production units. A strategic review of its Central European sawmills and building solutions operations is ongoing.
- Circularity Targets: The group published its Circularity Plan, aligned with the Global Circularity Protocol for Business, establishing a target to achieve 90% material circularity in direct operations by 2030.
Q3 2026 Outlook and EU ETS Regulatory Impact
Looking ahead to the third quarter of 2026, management expects market conditions to remain uncertain due to geopolitical tensions and supply chain cost pressures, particularly regarding energy, logistics, and raw materials influenced by conflicts in the Middle East. Although wood costs have moderated from recent highs, wood supply remains tight across northern Europe.
Financial performance in Q3 2026 will be impacted by several specific operational and regulatory factors:
- Maintenance Impact: Scheduled annual maintenance shutdowns across operational segments will increase maintenance costs by approximately EUR 40–50 million compared to Q2 2026.
- Oulu Annual Shutdown: A longer scheduled shutdown will take place at Oulu in Q3 to install efficiency enhancement equipment. The negative EBIT impact of the ramp-up is expected to remain similar to Q2 levels.
- Forest Divestment Impact: The 2025 divestment of 175,000 hectares of forest land in Sweden will reduce annual adjusted EBIT by approximately EUR 20 million (EUR 5 million per quarter).
- EU ETS Allocations Reduction: Income from emission rights sales is projected to drop sharply to EUR 10–20 million in 2026 (down from EUR 72 million in 2025). This decline stems from revised EU ETS rules, under which installations emitting more than 95% biogenic CO₂ no longer qualify for free allowance allocations.
Conclusion
Stora Enso's Q2 2026 results demonstrate that internal cost control, commercial discipline, and active portfolio management can deliver margin expansion even in a sluggish demand environment. While the loss of free EU ETS allowances and elevated maintenance schedules present near-term earnings headwinds in Q3, the group's strategic investments in fluff pulp, consumer board packaging, and the upcoming spin-off of its Swedish forest assets position it for resilient long-term competitiveness.