Stora Enso and M-real post deepened losses in third quarter results
Stora Enso has recorded a substantial operating loss in its interim results for January-September 2009, despite carrying out restructuring programmes including temporary mill closures and staff lay offs.
The paper giant made an operating loss of €502.6m (£454.4m) for the third quarter, down from a €138.7m loss a year earlier and heavily impacted by a €655m charge associated with impairment and restructuring costs.
Turnover decreased to €2.2bn from €2.7bn a year earlier, while pre-tax profit fell to €106.4m from €117.8m a year earlier.
Chief executive Jouko Karvinen said the markets remain generally weak, and the structural overcapacity in Europe continues to put pressure on prices in several product ranges.
The paper manufacturing sector has been hit with weak demand and raw material costs, and Karvinen said there will continue to be an impact on prices.
He added that European prices for publication paper and fine paper are expected to remain under pressure in the fourth quarter as supply exceeds demand. Prices are forecast to increase for containerboard.
Elsewhere, paper manufacturer M-real has also said it expects price increases to continue during the fourth quarter of 2009.
The company's pre-tax loss for the quarter deepened to €72m, compared with a €45m loss at the same time a year earlier. Turnover for the period was €618m, down from €826m a year earlier.
Chief executive Mikko Helander said the divestment of its Graphic Papers business and the streamlining of the remaining paper business has proceeded according to plan.
However, he said the measures will have a "considerably negative result" this year, although the benefits will be clear during 2010.
Despite some signs of improvement in the marketplace, Helander said there is still the risk that the slowdown of the global economy and the weak demand for paper will be prolonged.
Source: www.printweek.com - News
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