23 April 2010

STORA ENSO CEO SAYS 1Q RESULTS ARE UNACCEPTABLE

Stora Enso CEO Jouko Karvinen believes that although his company's first quarter earnings have improved a great deal, the results are compared to weak 2009 figures and operating profit "is still not acceptable

"Our first quarter results are further proof of the effectiveness of our early focus on things we can control. At EUR 119 million, the operating profit excluding fair valuations and non-recurring items is still not acceptable, but it is a remarkable improvement from almost zero a year ago, especially as it includes a loss of approximately EUR 12 million due to the Finnish stevedores' strike. Despite volume recovery, the cash flow from operations was a relatively decent EUR 119 million and our cash position remained strong. "

"The results also show that we are already not just a European forest industry company, but a global packaging and paper company, with our wood products experiencing recovery. This year's market pulp net capacity of about 900 000 tonnes is also a concrete sign of our ability to seize opportunities when they arise. This is a path we will stay on with selective investments in growth - but only in markets and areas where we can through sustainable competitive differentiation build a stable, long-term return for our shareholders. "

"In our portfolio, the Packaging Business Area continues to perform strongly, whereas in the paper business the situation is mixed. Common to paper demand in Europe is that even with the slow recovery of demand from the very weak levels of the first quarter of 2009, we are still a long way from the pre-crisis situation of 2008. That means we will stay on our path of prioritising pricing quality over volume, and managing capacity, costs and cash flow. Anything else, let alone waiting for better markets or other external factors to save our earnings, would be damaging - and in fact would risk losing the gains achieved through our efforts of the past three years. "