Hygiene product maker Essity Q4 core profit misses expectations

Swedish hygiene products maker Essity , opened new tab and reported fourth-quarter core earnings below market expectations on Thursday but said it was able to improve margins year-on-year despite lower volumes in the quarter. Essity reported adjusted earnings before interest, taxes and amortisation (EBITA) of 4.86 billion Swedish crowns ($465.32 million) for the last three months of 2023, missing an LSEG poll estimate of 5.22 billion crowns. This was up from 4.11 billion a year earlier, restated after the agreed sale of its Vinda, opens new tab stake.

Adjusted EBITA margin rose to 13.3 per cent from 11.2 per cent in the fourth quarter of 2022, its fifth consecutive margin increase. Essity has been growing its margins over the past year at the expense of falling volumes, a trend the management has said it wants to start reversing, though shipping disruptions at the Red Sea might again force companies to pass higher input costs onto consumers to protect margins. The company had in October flagged that cancellations of contracts in the third quarter would also have a negative effect on volumes in the fourth.