Stora Enso Shares Fall After IFRS Loss Overshadows Adjusted Profit Growth

Shares in Stora Enso Oyj (STEa) fell sharply on Tuesday after the forestry and paper products company reported a net loss under IFRS accounting standards for the first half of 2026, raising investor concerns about profitability and cash generation.

Reported Loss vs. Adjusted Profit

Stora Enso's half-year results, released Tuesday morning, presented a mixed financial picture that ultimately disappointed the market. While the company's adjusted EBIT rose approximately 27% year-over-year to €160 million, its reported IFRS operating result collapsed.

Key figures from the report include:

• IFRS Operating Result: Plummeted to €16 million from €64 million in the prior-year period.
• Impairments & Restructuring: The result was weighed down by €83 million in one-off costs.
• Asset Valuations: A further €61 million negative impact came from the fair valuation of biological assets.
• IFRS Earnings Per Share (EPS): This resulted in a loss of €-0.03, a reversal from a profit of €+0.03 in the same period last year.

Revenue Stagnates, Cash Flow Declines

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Beyond the headline loss, other key metrics pointed to persistent headwinds. Revenue for the period was essentially flat at €2,423 million, as lower selling prices and unfavorable currency movements offset the benefits from structural changes to the company's portfolio.

Furthermore, operating cash flow for the first half of the year weakened considerably, falling to €212 million from €336 million a year earlier. This decline in cash generation added to investor concerns about the company's near-term financial health.

Cautious Outlook and Market Reaction

In its commentary, Stora Enso's management acknowledged that market conditions remain uncertain. The company cited ongoing geopolitical tensions and trade-related volatility as significant risks to demand, supply chains, and input costs. Following the release, the company's A-series shares were trading down 4.1% at SEK 106.

The significant gap between the company's adjusted operational improvements and its reported IFRS profitability appears to be a primary driver of the negative market sentiment. Investors are likely to remain cautious until there is clearer evidence of stabilizing impairment cycles and a convincing recovery in operating cash flow.