Research
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Forestry & Paper: Smurfit Kappa Group: Q3 23A Insights
Key message: Smurfit Q3 23A trading updated pointed to slight EBITDA margin expansion to 19%, while the cadence of corrugated box volume declines easing further. FY EBITDA guidance implies a weaker Q4, mainly driven by lower corrugated box prices. Smurfit confirmed that the WestRock deal is on track to close in Q2 24E.
Forestry & Paper: Navigator Company Q3 23A Insights (UWF paper, Pulp and Tissue)
Key message: Navigator’s Q3 23A results confirmed that profitability is improving, despite challenging conditions. UWF order books are set to improve in Q4 and 2024 and UWF delivery times are increasing (now at 2021 levels). Navigator believes a more balanced S/D outlook for UWF and higher costs will support further UWF price increases. Pulp prices have been driven by Chinese demand – prudence is needed for pricing in 2024 as new supply ramps up vs. the volatility of the Chinese market.
Forestry & Paper: Nordic Paper Q3 23A Insights (Kraft Paper)
Key Message: Nordic Paper’s Q3 23A results confirmed that profitability of their Sack Kraft Paper segment is under pressure due to lower selling prices and elevated wood costs.
Afrimat – 1H FY24 Results
Key message: Nkomati should contribute substantially in 2H with steady state achieved in Oct 2023.
Calgro M3 – 1H FY24 Results
Key message: Relatively steady state earnings are expected for future years off a well-developed pipeline.
Cement Import Monitor: Imports to August 23
Key message: Imports stable relative to 2022. The weak ZAR has resulted in imported cement prices increasing 4% YTD.
Forestry & Paper Mondi: Q3 23A Insights
Key message: Underlying EBITDA softened further in Q3 and Q4 is likely to be lower driven by further weakness in kraft paper pricing and demand, coupled with a greater impact from maintenance and project-related shuts. Proceeds from Russia exit underpins our OVERWEIGHT rating in the ST.
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Forestry & Paper: Industry Insights
Key message: Pulp prices mostly stable and producers are targeting a $50/t increase in Europe. Graphic paper prices stable. Meanwhile, Billerud has backtracked on its planned 2% CFS increase in the US. Containerboard prices stable while OCC edges up further. Gas Futures in Europe now trading at €43/MWH.