BUSINESS OPERATIONS AND VALUE CREATION
to EUR 2.4 million. In addition to items reported as liquidity, the liquidity re-serve is complemented by Metsä Group’s internal un-drawn short-term credit facility of EUR 150.0 million and undrawn pension premium (TyEL) funds of EUR 227.6 million. The fair value of other non-current investments was EUR 345.4 million at the end of the financial period (31 December 2021: 181.0). The change in value was related to the increase in the fair value of Pohjolan Voima Oyj’s shares, which was caused by updating the long-term electricity price forecast used in the share valuation model. At the end of the financial period, an average of 8.5 months of the net for- eign currency exposure was hedged, including the hedging of the balance sheet position of trade receivables and trade payables. Metsä Board has investment grade credit ratings by S&P Global and Moody’s Investor Service. In December 2022 Moody’s upgraded Metsä Board’s rating to Baa2 (was Baa3), with stable outlook (was positive). The company’s rating by S&P Global is BBB-, with a stable outlook. ■ Investments Investments during the financial period totalled EUR 304.1 million (1–12/2021: 220.2), with growth and development investments accounting for 74%, acquired business operations for 10%, and maintenance invest- ments for 16%. Out of total investments, the company’s own property, plant and equipment amounted to EUR 278.1 million (216.1), and leased property, plant and equipment to EUR 26.1 (4.1). In the latter, the most significant item was the machinery and equipment for the boiler plant from the acquisition of Hämeenkyrön Voima Oy, totalling EUR 18.0 million. Renewal of the Husum pulp mill Metsä Board initiated the first phase of the renewal of the Husum pulp mill in 2019. The first phase included a new recovery boiler and turbine. By the end of the financial period, the investments made in the project totalled EUR 370 million. The total investment value of the first phase is estimated to be EUR 380 million. The new recovery boiler and turbine will increase the pulp mill’s electricity production, which will improve the energy self-sufficiency of the integrated mill and bring Metsä Board closer to its goal of completely fos- sil-free production by 2030. The new recovery boiler and turbine will also reduce the energy and maintenance costs of the integrated mill, improve production efficiency and shorten the duration of annual maintenance works. The investment is expected to improve Metsä Board’s annual cash flow by approximately EUR 35 million, of which at least half is expected to be realised in 2023. The plan is to replace the current fibre lines with a new fibre line during the second phase of the investment, later in the 2020s. Development programme of the Kemi paperboard mill In 2021, Metsä Board initiated the development programme for the Kemi paperboard mill, which will increase the mill’s annual white-top kraftliner capacity by around 40,000 tonnes. The company estimates that invest- ment value of the programme, originally EUR 67 million, will be higher due
to, among other things, rapid cost inflation. The investments will take place in 2021–2023. The programme includes a series of modernisation and bottleneck investments in the paperboard production line. As part of the programme, Metsä Board will also buy a modernised production line for unbleached pulp from Metsä Fibre. The production line’s annual capacity is roughly 180,000 tonnes. The development programme will reduce the mill’s water use by 40% and energy use by 5% per tonne of paperboard produced.
Increasing the production capacity of folding boxboard in Husum
Metsä Board will increase its annual production capacity of folding boxboard by 200,000 tonnes at the Husum integrated mill in Sweden. Following the investment, the production capacity of folding boxboard of the BM1 will be 600,000 tonnes per year. The value of the investment is approximately EUR 210 million. It will take place in 2021–2024, mainly in 2022 and 2023. The investment is expected to increase Metsä Board’s annual sales by approximately EUR 200 million and improve annual comparable EBITDA by approximately EUR 50 million. The company expects to achieve the growth and improved result in full in 2026. Due to the growing logistics volumes of the Husum integrated mill, the port concept will also be renewed. The value of the investments still partly being planned is EUR 20–30 million. The investments mainly target new warehouse capacity, expected to be completed in 2023.
Pre-engineering for new folding boxboard mill in Kaskinen
In autumn 2022, Metsä Board launched pre-engineering for a new folding boxboard mill with an annual capacity of approximately 800,000 tonnes in Kaskinen. The pre-engineering includes technical design, infrastructure and logistics solutions, and tendering for the main equipment. In addition, an environmental impact assessment (EIA) and an envi-ronmental permit process are ongoing. A potential investment decision could be made in 2024 at the earliest. Metsä Fibre’s Kemi bioproduct mill Metsä Board’s associated company Metsä Fibre is building a new bioprod- uct mill in Kemi. The mill is expected to be completed in 2023. The new bioproduct mill will produce annually some 1.5 million tonnes of softwood and hardwood pulp as well as other bioproducts. The pulp production capacity includes the existing pulp production line for unbleached pulp used in the production of white kraftliner, with an annual capacity of roughly 180,000 tonnes. The new mill will replace the current pulp mill in Kemi, with an annual capacity of about 610,000 tonnes. The bioproduct mill will not use any fossil fuels, and its electricity self-sufficiency will be 250%. The estimated investment value of Metsä Fibre’s bioproduct mill is EUR 2.02 billion (Interim report for January–September 2022: EUR 1.85 billion). The financing of bioproduct mill is composed of internal financing and debt. Metsä Board will not invest equity in Metsä Fibre to finance the project.
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