Translation: Original published in Finnish on 07/13/2026 at 07:40 am EEST

On Friday, Koskisen published a Q&A summary of its pre-Q2 earnings silent period call. The company’s comments on the market environment and operational performance were well in line with the cautious assumptions we made in connection with the Q1 report. The downturn in construction continues, and cost pressures are still eroding Koskisen's margins, but based on the call, no major operational challenges have hit Q2. Q2 is seasonally strong for Koskisen, but in Q3, summer production shutdowns and the Central European holiday season are expected to curb figures also this year.

Demand environment still challenging, although some light in plywood

Based on the Q&A responses, demand for sawn timber has met the company's expectations and normal seasonality, but the generally weak demand situation has made it difficult to pass on increased freight costs to end-product prices. Q2 is typically the best quarter of the year seasonally in the Sawn Timber Industry. Sawn timber prices rose slightly in Q2 quarter-on-quarter and remained below the comparison period, which is exactly in line with our expectations presented in connection with the Q1 report. In the Panel Industry, on the other hand, demand for birch plywood has been slightly higher than estimated. Increased production costs have been partially passed on to birch plywood prices, but the uncertain market is slowing down the full transfer of cost pressures to sales prices, even for birch plywood. As we expected, demand for chipboard, which is highly dependent on Finnish construction, has remained weak.

Operational challenges easing, but wood prices remain high

In Q1, Koskisen suffered significant operational challenges at the Järvelä sawmill and in birch plywood production. During Q2, production at the sawmill met the company's estimates, even though the beginning of the quarter was still gloomy. The planned commissioning of new channel dryers in June is an expected step forward in debottlenecking, but we estimate that the company will gradually achieve the targeted 50,000 cubic meter capacity increase with the investment. However, the ramp-up of new technology in birch plywood production has continued to weigh on production volumes and increased costs, which has likely eroded some of the support from better-than-expected demand in the Panel Industry. On the cost side, softwood log prices continued their slight increase in spring and early summer from already high levels, and timber trading has been significantly quieter than usual. The company expects log prices to have stabilized and anticipates them to decrease towards the end of the year. A decrease in wood costs would be important for the company's margin recovery, given the prolonged weak demand in construction, but we believe the tight timber market keeps risks elevated for now.