* Q3 adj EBIT 231 mln vs 236 mln consensus
* Sees Q4 adj EBIT 100-180 mln eur, below all forecasts
* Raises savings target to 275 mln eur from 200 mln
(Adds industry outlook, comment)
By Anne Kauranen and Tarmo Virki
HELSINKI, Oct 29 (Reuters) - Finnish paper firm Stora Enso
said geopolitical uncertainties would dampen demand
and prices in the fourth quarter, pushing its shares and those
of its European peers lower on Tuesday.
The pulp, paper and packaging board maker - one of the
largest globally - warned that demand growth is forecast to slow
across its businesses and the decline in demand for paper would
continue in Europe.
While the shift to online reading has reduced the need for
newspaper and magazine paper for years, growth in ecommerce has
increased the usage of shipping boxes and packaging materials.
But research firm Fastmarkets said that boost was beginning
to fade with the biggest online companies focusing on using less
packaging after a rise in corrugated and containerboard prices
in the last few years.
Stora Enso forecast an adjusted operating profit of 100-180
million euros in the fourth quarter as prices for pulp and paper
weaken, missing all analyst expectations which ranged from 182
million to 315 million euros, according to Refinitiv data.
"Deteriorating trading conditions caused by geopolitical
uncertainties related to trade wars and a possible hard Brexit
are expected to impact Stora Enso negatively," said Chief
Executive Karl-Henrik Sundstrom.
The company's shares fell almost 9% before recovering some
losses, with European paper and packaging firms UPM,
Svenska Cellulosa, Metsa, Mondi
and Holmen all down by as much as 4%.
UPM had last week reported better than expected profits for
the September quarter saying it had seen modest demand growth in
most areas.
Stora Enso reported a sharp drop in profit in the three
months to September, with adjusted operating profit in the third
quarter falling 35% from a year earlier to 231 million euros
($256 million) and missing the average forecast of 236 million
in a Refinitiv analyst poll.
Sales in July-September fell 7% from a year earlier to 2.4
billion euros, missing a forecast of 2.51 billion euros.
Antti Viljakainen of equity research firm Inderes said in a
note that the weak outlook would pressure the company in 2020.
Stora Enso said it would increase its cost cutting target to
275 million euros from 200 million to battle slowing demand.
"The boxboard industry faces challenges in terms of fiber
costs, sales growth, operating rates, and profits," Fastmarkets
analyst Ken Waghorne said in a statement earlier this month.
($1 = 0.9019 euros)
(Reporting by Tarmo Virki and Anne Kauranen; Editing by Tom
Hogue and Kirsten Donovan)
Mondi (MNDI)
