Holmen reports third quarter earnings miss on weak paper unit

Holmen AB posted third quarter earnings below market expectations, with operating profit of SEK549 million falling short of the SEK636 million consensus forecast.

The Swedish forestry and paper company’s board and paper division recorded SEK128 million in earnings, missing the SEK215 million analyst estimate.

The company’s third quarter operating profit declined from SEK689 million in the second quarter. Market conditions remain challenging, with cautious consumers and a weak construction market affecting performance.

Holmen announced plans to reorganize its Forest division into two separate areas by the third quarter of 2027. One area will focus on managing Holmen’s own forests to maximize value, while the second will handle wood procurement to enhance the competitiveness of industrial activities.

The company’s forest valuation remained largely unchanged at SEK57 billion, in line with expectations. The valuation implies SEK370 per share in forest value, or SEK277 per share after applying a 25% liquidity discount. Holmen conducts forest revaluations at year-end.

Looking ahead to the fourth quarter, higher operating profit is expected due to the absence of maintenance costs, which will add SEK150 million, and seasonally higher renewable energy prices during winter months.

Analysts project potential downside of 4% to 7% for 2026 consensus operating profit estimates of SEK3 billion, and 4% to 8% downside risk for 2027 consensus estimates of SEK3.5 billion.