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Investing.com -- Swedish forest products company Holmen AB (STO:HOLMB) on Thursday reported third-quarter EBIT of SEK737 million, missing consensus estimates of SEK777 million by 5%, primarily due to weakness in its wood products division.
The wood products segment posted a loss of SEK91 million, significantly worse than the expected loss of SEK31 million, as construction demand remained weak. The company is adjusting production in southern Sweden in response to elevated sawlog costs that are squeezing margins.
Despite the overall miss, Holmen’s board and paper division performed better than expected with EBIT of SEK358 million versus consensus of SEK324 million. The forest division was slightly below expectations at SEK519 million compared to forecasts of SEK528 million.
Competition for sawlogs remains high but has declined for pulpwood from previous levels. In the board and paper segment, consumerboard demand is weak and graphic paper demand is lower, though market prices were reported as unchanged despite industry indexes showing declines.
The energy division was negatively impacted by low electricity prices, which fell below production costs during the quarter.
Holmen’s forest valuation, currently at SEK58 billion (equivalent to SEK375 per share excluding liquidity discount), will be updated annually at the full-year 2025 results. The company maintains a strong balance sheet with a net debt to EBITDA ratio of 0.8x and continues to return capital to shareholders.
Jefferies analysts expect approximately 5% downside risk to the 2025 consensus EBIT estimate of SEK3.48 billion. Holmen shares have a price target of SEK405, representing 15% upside from the current price of SEK352.
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