Stora Enso blames losses at news slump
HELSINKI (AFP) - Europe's leading paper maker Stora Enso reported deep third-quarter losses on Thursday, blaming a slump in newspaper circulation and prices, and said the remainder of the year looked weak.
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Swedish-Finnish Stora Enso made a net loss of 519.7 million euros (778.5 million dollars) in July-September, compared to a net loss of 118.7 million euros in the same period in 2008.
Its operating loss was 502.6 million euros, down from a loss of 138.7 million euros a year earlier, while sales decreased by 18 percent to 2.2 billion euros.
"The markets remain generally weak and the structural overcapacity in Europe continues to put pressure on prices in several product ranges," chief executive Jouko Karvinen said in a statement.
He added that a programme to cut capacity and jobs to boost profitability was starting to bear fruit, however.
When non-recurring items worth 655 million euros were excluded from results, Stora's operating profit rose to 131.5 million euros in the third quarter, up from 48.5 million euros in the previous quarter.
Global financial turmoil has dented the market for newspapers and print advertisements, dealing a further blow to paper makers which have for years been struggling with overcapacity.
Stora has been restructuring its operations with a heavy hand in recent years and since September 2008 it has announced nearly 5,000 planned job cuts.
Karvinen said Stora would continue to cut costs and to boost its earnings and pricing power in the coming months.
"We will focus on what we can do ourselves, we will not await or speculate about market recovery or other external improvements," he said.
Stora expects paper demand in the fourth quarter to be lower than in the third quarter. The company has not yet made forecasts for 2010.
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Last Updated (Thursday, 22 October 2009 11:52)
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