Koskisen Corporation: Pre-silent period call – Q&A on key themes for Q3 2024

On 15 October 2024, Koskisen Corporation held a pre-silent period call for analysts. This press release summarizes the key questions and answers discussed during the call.

Koskisen's silent period for the Q3 2024 will commence on 16 October 2024. The interim report for January-September 2024 will be published on 15 November 2024 at 8:30 a.m. EET. A Finnish-language webcast will follow at 10:00 a.m. EET, with the link to be provided later.

Q3/2024 – Q&A highlights

MARKET

Q: Has there been any change in the demand situation or customer behavior in either business during the Q3?
A: Panel Industry's order book was strong after the summer shutdown. Since then, the continued weak economic situation in Central Europe has been slightly reflected in the market demand for panel products. The demand situation in Sawmill Industry has remained the same as in the previous quarter.

Q: Have the recent macro data and interest rate movements changed your expectations for the demand recovery in the construction sector in 2025–2026?
A: The general perception is that the decline in interest rates would start to show as an improvement from H2/2025 onwards.

Q: Have there been any cautiously positive signs in the construction sector or related customers in the Q3?
A: In sawn timber, we have seen a slight positive recovery in Finland. Overall, no significant change can be seen.

Q: Price and demand outlook for sawn timber in the Q3 and for the rest of the year?
A: The price and overall demand for sawn timber remained at the Q2 level. The assumption is that the price level of sawn timber will remain at the same level during the rest of the year.

Q: Price and demand outlook for plywood and chipboard in Q3 and for the rest of the year?
A: The price and overall demand for panel products remained at the Q2 level. It is assumed that the price level of flat products will remain at the same level during the rest of the year.

Q: Have the recent measures restricting imports of Russian birch plywood had a visible impact on Koskisen's relevant markets?
A: The potential impact of the anti-dumping investigation launched by the EU in October will be reflected in the market later next year.

Q: Have there been geographical differences in market demand?
A: The Japanese market, which is relevant to Koskinen, has an expectant mood, but demand for the company's products has remained at the anticipated level. Sawmill closures in British Columbia have reduced the supply of quality lumber from Canada to Japan. This may strengthen the demand for products manufactured in Europe in future.

Q: Last week, the first announcements of the closures of plywood production were seen in the market, what does the situation look like in general?
A: Any immediate impacts on the operating environment are not foreseen due to the announced closures.

PRODUCTION AND NEW SAWMILL

Q: What kind of utilisation rates has the new sawmill reached and what is a recent situation? Can you say something about the new sawmill's production expectations for 2025 at this point?
A: By the end of September, the sawmill's operating rate has met the targeted level. At the end of the third quarter, we also reached the targeted annual production level of 400,000 m3. For the rest of the year and 2025, the maximum capacity of the channel kilns will continue while reducing weekly production shifts and transferring maintenance shifts from weekends to weekdays.

Q: The new channel kiln has been in use for a full quarter for the first time in the Q3. How did the operation of the channel kiln go and did anything surprising happen?
A: The newest channel kiln was commissioned into production use in June 2024. The kiln has passed capacity tests and the drying quality meets the required level. The project is completed.

Q: What are the stock levels in the value chains of different product groups at the moment?
A: There has been no significant change in panel products, and it is generally seen that efforts are being made to optimise inventory levels to meet demand at different stages of the value chain. In Koskisen's product groups, the sawn timber supply chain is estimated to be fairly empty.

Q: How long did you take production stoppage in Sawmill Industry and Panel Industry during the summer vacation season?
A: In Sawmill Industry, stoppages were kept in stages; the length of the stoppages in the production chain was two weeks. In Panel Industry, the stoppages took place in July and August; three weeks at the chipboard factory and four weeks at the plywood mill.

Q: Have there been any unplanned production stoppages during the Q3? How has the return from the summer stoppages gone?
A: There have been no unplanned stoppages in the production. The return from the summer stoppage went as planned.

Q: What kind of production stoppages are you possibly planning for December 2024?
A: In Sawmill Industry, winter holidays in sawmill production will be held between Christmas and New Year, during which equipment is serviced. In post-processing and processing, production is at least partly running also during the Christmas intervening days. In Panel Industry, there will a production stoppage of one to two weeks, which is used for various maintenance measures and installation of investments.

Q: How has your pricing developed in Sawmill Industry and Panel industry during the Q3 and what are the obvious limitations to raising prices?
A: In Panel Industry and Sawmill Industry, efforts have been made to keep prices at the current level. Pricing is naturally influenced by market demand.

Q: How has the log field investment progressed?
A: The log field is almost ready, now we are preparing for the finishing and commissioning of the sorting line. The project is progressing on schedule and will be fully completed in early 2025. It is expected that log reception will be fully transferred to the new field during Q1/2025.

WOOD MARKET

Q: The price of roundwood has decreased slightly from its peaks, is this just seasonality or do you expect the decline to continue?
A: The price development is partly seasonal, but considering the current price level of sawn timber, the price of wood raw material would be expected to decrease further.

Q: Were there any surprises in the development of the wood market during the Q3 compared to your expectations?
A: The supply of wood on the market has been in line with expectations. Stumpage prices have been slightly lower. The price level is still high, which especially burdens the profitability of Sawmill Industry.

Q: Have you noticed a weakening of the pulp industry's demand for wood chips during the Q3, and do you think a possible weakening will affect your wood procurement or otherwise Koskinen's business operations?
A: The demand for wood chips has remained good and prices have strengthened towards the end of the year. The demand for energy wood is expected to strengthen seasonally.

Q: How is the company’s wood stock situation at the moment?
A: The wood stock situation is good and in line with the targeted level, and thus the outlook for the rest of the year is stable.

Q: What is the outlook for other cost items excluding wood costs for the end of the year and the beginning of next year?
A: The raw material price level is expected to remain relatively stable and no significant changes are expected.

For more information, please contact:
Sanna Väisänen, Director, Sustainability and Communications, Koskisen Corporation
[email protected]
tel. +358 20 553 4563

Koskisen is an international wood processing specialist with more than a century of experience and known for its agility and ability to listen to the customer. We utilise our valuable wood raw material as thoroughly as possible, up to the last particle of sawdust. We manufacture high-quality and sustainable circular bioeconomy products that store carbon for decades. The Group’s revenue in 2023 was EUR 271 million. Read more: koskisen.com