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Ukraine situation could increase negative outlook for paper and forest products industry

According to Moody’s, the paper and forest products industry’s EBITDA (earnings before interest, taxes, depreciation, and amortization) will decrease by 10-12% over the next 12 months, with significantly higher energy, transport, material, and labor costs counteracting most of the growth offered by the high demand in the paper packaging segment. Russia’s invasion of Ukraine is expected to exacerbate pressure on costs and demand, especially for energy.

Moody’s follows the EBITDA of 41 paper and forest product companies globally. The company predicts that these companies will experience a decrease of between 10 and 12% in EBITDA over the next 12 months, with companies in North America, Europe, and Latin America all likely to be affected.

In North America, the region accounting for over half of the companies rated by Moody’s, will see a slightly higher decline than the overall average – between 14 and 16% across the year-long outlook period. While North American corrugated packaging companies like International Paper and consumer paper packaging companies like Graphic Packaging will see a growth in earnings due to price increases in their sector, wood and pulp companies are likely to see a decline with prices dropping below those of the previous period.


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