Stora Enso Oyj (STERV) fell the most in three weeks after Europe’s biggest papermaker said the opening of its Uruguay joint-venture pulp mill will be delayed until early 2014 and forecast weak demand in the fourth quarter.
The stock fell as much as 4.7 percent, the biggest intraday decline since September 30, and traded 3.5 percent lower at 6.69 euros as of 3:05 p.m. in Helsinki. Trading volume was 108 percent of the three-month daily average.
“The timetable for completing our joint-venture pulp mill Montes del Plata in Uruguay was revised during the quarter after the main technology contractors informed the company that they could not complete their work on schedule,” Chief Executive Officer Jouko Karvinen said in a statement.
Stora Enso is seeking long-term growth from emerging markets and other operations besides paper. In addition to the pulp venture in Uruguay, the Helsinki-based company is building a consumer-board machine in Guangxi and a Polish container-board operation in Ostroleka was inaugurated in May. Stora and its partner in the joint venture, Chilean papermaker Celulosa Arauco y Constitucion SA, had targeted to begin production at Montes del Plata last quarter.
The company revised third-quarter earnings before interest and taxes to 184 million euros ($252 million), compared with 180 million euros given in a preliminary report on Oct. 9. That beat second-quarter profit by 48 percent with a “strong performance” from the renewable packaging unit, Karvinen said. Third-quarter sales of 2.56 billion euros missed the 2.67 billion-euro average of 10 analyst estimates compiled by Bloomberg.
Stora, with a market value of 5.3 billion euros, forecast an annual drop in fourth-quarter earnings, citing seasonal weakness in renewable packaging as well as weak demand and prices in European paper markets.
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