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Tissue maker Essity beats profit expectations as pandemic highlights hygiene

10/22/2021 | 03:34am EST
FILE PHOTO: FILE PHOTO: Essity products are seen in Stockholm

STOCKHOLM (Reuters) -Essity, the world's second-biggest maker of consumer tissue paper, surprised on the upside on Friday, reporting a rise in third-quarter profit back to pre-pandemic levels.

Essity - whose products include toilet paper and paper handkerchiefs with brands such as Lotus, Edet, Tempo and Vinda - said an easing of pandemic restrictions and growing consumer awareness of the importance of hygiene helped boost profit.

Shares in the Swedish company were up 6% in early trade.

The rival to Procter & Gamble and Kimberly-Clark raised prices in the quarter and said it was planning for further increases to offset upcoming higher costs for raw materials, energy and distribution.

It reported an operating profit of 3.9 billion crowns ($451 million) for July-September, up from 3.8 billion crowns a year earlier.

Sales rose 9% in the quarter, with organic sales increasing 7%, it said.

Analysts polled by Refinitiv had on average estimated a profit of 3.4 billion crowns.

"Sales were positively impacted by more favourable market conditions and growing awareness of the importance of hygiene and health," Essity said in a statement.

Compared with the pre-pandemic third quarter of 2019, profit was unchanged while organic sales were up 2%.

Essity, which is also the global leader in hygiene products for businesses under the Tork brand and in incontinence products with TENA, announced a net sales growth target of more than 5%. Its previous target was for organic sales growth of more than 3%.

($1 = 8.6021 Swedish crowns)

(Reporting by Anna Ringstrom; Editing by Helena Soderpalm, Vinay Dwivedi and Susan Fenton)

By Anna Ringstrom

ę Reuters 2021
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