Finnish pulp, paper and packaging-board maker Stora Enso is looking for possible merger and acquisition opportunities thanks to its strong balance sheet, chief executive Annika Bresky has said.
Growing global demand for packaging board, wood-based construction materials and pulp helped the company achieve a record margin last year.
"We have benefited from our strategic positioning and scale to achieve a full year operational EBIT margin of 15%, the highest in our long history," Bresky said.
The firm's shares rose as much as 6% after it delivered a better-than-expected underlying fourth-quarter profit and forecast a strong performance in 2022.
"Quarter one is fully booked," Bresky said.
Stora Enso said it sees growth potential particularly in biomaterials where it last year began a pilot plant for Lignode, which it described as a high potential, fossil-free, anode material for batteries in electric vehicles and other electric applications.
Bresky said Stora expected to finish a prefeasibility study of Lignode in the first quarter, targeting the needs of the automotive industry.
"Our ambition is to have five mills kind of scaled up in the coming years," she told analysts.
Stora said it would invest €40 million in new technology and the restructuring of its fluff pulp production site at Skutskar in Sweden to cut costs and the plant's carbon footprint.
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October-December adjusted operating profit rose to €426 million ($475 million) from €118 million a year ago, beating the mean forecast of €357.6 million in a Refinitiv analyst poll.
Unlike Finnish rival UPM-Kymmene, Stora said it had succeeded in managing global logistical disturbances and in implementing corresponding price increases to mitigate rising fibre, energy and other variable costs.
The fact that Stora produces 67% of the energy it consumes helped it keep costs under control, the company's chief financial officer, Seppo Parvi told Reuters.
Parvi said rising living standards were driving the growing global demand for fluff pulp used in hygiene products such as diapers for both children and the elderly.
The company's directors proposed a record dividend of €0.55 per share.