The rapid weakening in the global economy has been reflected in the financial result of the Kemira Group. The result of the nitrogen fertilizer business in particular has weakened, in addition to which there will be a few unusual expense items in 2001.
The Pulp&Paper Chemicals SBU of the Chemicals business area has suffered from the low operating rate of its client industries, but its result will remain close to last year's level. The water treatment chemicals business has developed better than last year. In SBU Industrial Chemicals, the market situation of titanium dioxide pigments has weakened over the course of the year. Pension expenses have increased significantly this year in Chemicals in particular, as returns on the investments of its pension funds fell considerably short of last year. The employer contributions of Kemira's Finnish pension funds are expected to be over 35 million euros higher than last year, when good returns on investments decreased employer contributions. The operating profit of the entire Chemicals business area is expected to be lower than last year.
The uncertain economic situation and the high levels of fertilizer stocks after a record-wet spring have contributed to the situation. The result of Agro has weakened particularly in the nitrogen fertilizer business.Even though the Agro operating profit as a whole is expected to improve from last year, the amount of the improvement will be less than previously anticipated.
In the Paints&Coatings business area, developments in the main markets have remained positive. For industrial coatings, the weak economic developments in England and Central Europe as well as the production cuts of significant clients have nevertheless affected the result. In the Deco business, the structural reorganizations and goodwill amortizations of Alcro-Beckers will weaken operating profit as expected, and synergy benefits will not yet have a sufficient effect to compensate. The operating profit of the business area will fall short of last year.
Financing expenses are estimated to remain near last year's level. The operating profit of the Group will be lower than in 2000.
Kemira will publish its financial report for nine months on 6 November 2001.