Source: Inderes

 Translation: Original published in Finnish on 5/15/2026 at 9:20 am EEST.

The main points of Koskisen's Q1 report, published this morning, were already known following the profit warning and preliminary Q1 data released by the company on Wednesday. The company's profitability developed weaker than our expectations in both businesses. Due to the weak Q1 result and the significantly lowered profitability guidance, our earnings estimates, as well as consensus estimates, are under considerable downward pressure for at least the current year. Koskisen's stock did not react much to Wednesday's guidance downgrade, but considering the rather strong profit warning and the overall picture of the Q1 report, we see the risks related to today's stock price reaction as negative.

Company exceeded 100 MEUR quarterly revenue mark for the first time in Q1

Koskisen's Q1 revenue grew by 22% to 105 MEUR, which exceeded our and consensus estimates quite clearly. Growth came from the Sawn Timber Industry, where the acquisition of Iisveden Metsä clearly supported revenue inorganically. Organic delivery volumes of sawn timber were likely strong despite the weak market situation in construction and production challenges at the Järvelä sawmill earlier in the year, and the forecast beat was mainly due to volumes in the Sawn Timber Industry. In the Panel Industry, revenue fell slightly short of our forecasts due to stable volumes, which was likely caused by production challenges in the birch plywood business and a larger-than-expected decline in chipboard volumes. There do not appear to have been significant deviations in the average prices of either business segment compared to our forecasts.

Operational challenges and raw material costs weighed on margins

Koskisen's adjusted EBITDA decreased 31% year-on-year to 6.6 MEUR, which was clearly weaker than our and consensus estimates. Profitability declined and fell short of estimates in both segments due to production challenges and cost increases resulting at least partly from the Middle East crisis. The Sawn Timber Industry's EBITDA declined by almost 50% to 2.9 MEUR. As expected, profitability was weighed down by the weak market situation. In addition, results were negatively impacted by start-up challenges at the Järvelä sawmill after maintenance shutdown, cold weather early in the year, and a weaker product mix compared to the prior-year period. In addition, margin pressure was exacerbated by persistently high wood raw material prices, while the prices of woodchips and pulpwood, which are by-products of production, fell significantly. The Panel Industry's EBITDA also decreased as expected from a rather modest comparison period to 4.0 MEUR. Birch plywood production also experienced disruptions in Q1, and the dilutive effect on earnings from the chipboard business, driven by the Finnish construction sector, has likely been somewhat greater than we expected. On the lower lines, there were no significant deviations in depreciation, financial expenses, or taxes compared to our forecasts or the company's recent figures. Koskisen's reported EPS thus fell to EUR 0.04 in Q1, especially reflecting the decline in operating profit, and clearly missed all estimates. In terms of cash flow, the report was also as sluggish as expected, as volume growth and seasonal factors tied up working capital, and investments remained quite active in Q1.

Geopolitics and a slow start drag down full-year margin outlook

In the report, Koskisen reiterated the guidance provided in Wednesday's profit warning, according to which the company's 2026 revenue is expected to grow from the 2025 level (unchanged) and the adjusted EBITDA margin is expected to be below the full-year 2025 level of 8.1% (was adjusted EBITDA-% 8–12%). Based on the comments, the macroeconomic effects of the war in Iran (i.e. at least a temporary acceleration of inflation and a rise in market interest rates) have shifted expectations for a stronger recovery in construction sector demand. We estimate that this limits the pricing of rising energy, logistics, and certain raw material costs into end products and causes margin pressures. Also, the Finnish sawlog market remains tight. Before the profit warning, we expected Koskisen's adjusted EBITDA margin for the current year to be 10.0%, and the consensus was slightly higher. Thus, the company's earnings forecasts are subject to significant downward pressure with the new guidance, at least for the current year. The timing and slope of the construction turnaround remain very difficult to assess, even in the medium term, following recent negative surprises.