Finnish forest industry giants report stronger Q2 earnings despite stagnant sales
Finland’s two leading forest industry companies, UPM and Stora Enso, reported improved second-quarter earnings on Thursday, though sales remained largely unchanged amid persistent market challenges.
Stora Enso’s adjusted operating profit rose by 27% year-on-year to 160 million euros, while revenue held steady at 2.42 billion euros, matching the previous year’s level (Yle). UPM, meanwhile, saw its comparable operating profit surge by 71% to 212 million euros, with sales increasing marginally to 2.36 billion euros from 2.34 billion euros in the same period last year (Daily Finland).
Both companies attributed their earnings growth to internal operational measures. UPM highlighted higher production volumes, effective margin management, and ongoing efficiency improvements as key drivers. Stora Enso pointed to the ramp-up of a new consumer board line in Oulu, increased volumes, and lower variable costs as factors supporting its performance (Daily Finland).
Despite the positive results, industry analysts cautioned against interpreting them as signs of a broader sector recovery. Ville Arffman of Finnish investment service Sijoittaja noted that the improvements were primarily due to company-specific actions rather than a rebound in market conditions. Juuso Kenkkilä, head of equities and investments at OP Financial Group, told Kauppalehti that it was premature to conclude the sector had reached its lowest point, citing insufficient evidence of a demand recovery (Daily Finland).
Persistent challenges weigh on the sector
The forest industry, a cornerstone of Finland’s export economy, continues to face headwinds. Finland’s forest area stood at 22.5 million hectares in 2025, the second-largest in the European Union, according to the State of Europe’s Forests 2025 report. However, the sector has struggled with subdued global demand, geopolitical uncertainty, and elevated raw material and energy costs in recent years (Daily Finland).
The suspension of Russian wood imports following the outbreak of the Russia-Ukraine conflict has further tightened raw material supplies, adding pressure on Finnish producers (Daily Finland). In 2025, the forest industry’s exports were valued at 12.6 billion euros, accounting for 17% of Finland’s total goods exports, underscoring its significance to the national economy (Finnish Forest Industries Federation).
Government support and future outlook
The Finnish government has taken steps to bolster the sector, focusing on promoting higher value-added forest products, strengthening research and innovation, and ensuring the long-term supply of domestic timber (Daily Finland). However, both UPM and Stora Enso warned that geopolitical and trade uncertainties remain significant risks, with demand across many end markets still weak.