HELSINKI, Finland, July 27, 2005 (PRIMEZONE) -- Second Quarter Results (compared with previous quarter). Stora Enso (NYSE:SEO) today announced that Stora Enso's earnings per share were EUR 0.00 (EUR 0.07) excluding non-recurring items. Operating profit excluding non-recurring items was EUR 17.7 (EUR 112.7) million. Profit before tax amounted to EUR 0.1 (EUR 83.6) million excluding non-recurring items. There was a non-recurring item of EUR -12.0 million due to impairment of fixed assets at Veitsiluoto Sawmill in Finland.
Sales at EUR 3 187.3 million were 1.3% higher than the previous quarter's EUR 3 144.9 million. Cash flow from ongoing operations was EUR 387.9 (EUR 159.4) million and cash flow after investing activities EUR 130.6 (EUR -198.1) million. Cash earnings per share were EUR 0.35 (EUR 0.41) excluding non-recurring items. Net financial items were EUR -34.6 (EUR -43.1) million.
EUR million 2003 2004 H1/04 H1/05 Q2/04 Q1/05 Q2/05
Sales 12172.3 12395.8 6120.8 6332.2 3102.9 3144.9 3187.3
EBITDA 1)2) 1707.7 1510.9 753.9 687.2 361.2 388.8 298.4
Operating profit2) 522.9 338.9 158.4 130.4 56.3 112.7 17.7
Non-recurring
items -54.4 369.7 115.7 -12.0 - - -12.0
Operating
margin 2), % 4.3 2.7 2.6 2.1 1.8 3.6 0.6
Operating profit 468.5 708.6 274.1 118.4 56.3 112.7 5.7
Profit before
tax and minority
interests 2) 316.3 271.8 126.3 83.7 46.8 83.6 0.1
Profit before
tax and minority
interests 207.8 641.5 242.0 71.7 46.8 83.6 -11.9
Net profit for
the period 136.0 740.8 455.6 48.5 50.3 58.6 -10.1
EPS 2), Basic, EUR 0.24 0.26 0.12 0.07 0.06 0.07 0.00
EPS, Basic, EUR 0.16 0.89 0.55 0.06 0.06 0.07 -0.01
CEPS 2)3), EUR 1.63 1.67 0.83 0.76 0.43 0.41 0.35
ROCE 2), % 4.5 3.0 2.8 2.4 2.1 4.1 0.6
1) EBITDA = Earnings before Interest, Taxes, Depreciation and
Amortisation
2) Excluding net non-recurring items. Exceptional transactions
that are not related to normal business operations are accounted
for as non-recurring items. The most common non-recurring items
are capital gains, additional write-downs, restructuring provisions
and penalties. Non-recurring items are normally specified
individually if they exceed one cent per share.
3) CEPS = (Net profit for the period + depreciation and
amortisation)/average number of shares
Short-term Outlook
Commenting on the outlook, Stora Enso's CEO Jukka Harmala said, "The Finnish labour dispute ended on 1 July 2005. The new labour agreement, with its significant changes in labour practices such as production continuing during the Midsummer and Christmas holidays and increased flexibility in outsourcing, will contribute to the long-term competitiveness of the Finnish forest products industry.
The estimated effects of the labour dispute in the third quarter of 2005, with production restarting in early July, will be about EUR -40 million on operating profit and some 100 000 tonnes of lost paper and board production."
In Europe demand for advertising-driven paper grades is expected to remain rather good. Firm demand for publication papers is forecast, because the Finnish labour dispute has decreased inventories in the value chain and demand normally picks up in the catalogue season. Fine paper demand is expected to improve and prices should be rather stable. Packaging board demand and prices are anticipated to be stable. The market balance in wood products is expected to remain good, thus improving the price outlook.
In North America seasonal factors will improve demand for magazine paper. The tighter supply of magazine paper caused by the Finnish and Canadian labour disputes should improve the supply and demand balance, and prices are forecast to rise mainly for non-contractual business. Newsprint demand continues to decline, but prices are expected to rise because of the favourable supply and demand balance. There should be a seasonal pick-up in demand for coated fine paper and prices should remain stable.
In Asia fine paper demand has been growing steadily, but prices are under some pressure due to new capacity.
For further information, please contact: Tim Laatsch, Senior Vice President, Communications Stora Enso North America tel. 715 422 4023
www.storaenso.com www.storaenso.com/investors
Stora Enso's third quarter results will be published on October 27, 2005.
The full-length version of the Stora Enso interim review is available on the Stora Enso Web site at www.storaenso.com/investors or from the following link:
http://hugin.info/3034/R/1003974/154348.pdf
It should be noted that certain statements herein which are not historical facts, including, without limitation those regarding expectations for market growth and developments; expectations for growth and profitability; and statements preceded by "believes","expects", "anticipates", "foresees", or similar expressions, are forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Since these statements are based on current plans, estimates and projections, they involve risks and uncertainties, which may cause actual results to materially differ from those expressed in such forward-looking statements. Such factors include, but are not limited to: (1) operating factors such as continued success of manufacturing activities and the achievement of efficiencies therein, continued success of product development, acceptance of new products or services by the Group's targeted customers, success of the existing and future collaboration arrangements, changes in business strategy or development plans or targets, changes in the degree of protection created by the Group's patents and other intellectual property rights, the availability of capital on acceptable terms; (2) industry conditions, such as strength of product demand, intensity of competition, prevailing and future global market prices for the Group's products and the pricing pressures thereto, price fluctuations in raw materials, financial condition of the customers and the competitors of the Group, the potential introduction of competing products and technologies by competitors; and (3) general economic conditions, such as rates of economic growth in the Group's principal geographic markets or fluctuations in exchange and interest rates.
Stora Enso is an integrated paper, packaging and forest products company producing publication and fine papers, packaging boards and wood products, areas in which the Group is a global market leader. Stora Enso sales totalled EUR 12.4 billion in 2004. The Group has some 45,000 employees in more than 40 countries in five continents and about 16.4 million tonnes of paper and board annual production capacity and 7.7 million m3 of sawn wood products, including 3.2 million m3 of value-added products. Stora Enso's shares are listed in Helsinki, Stockholm and New York.
Stora Enso Oyj Business ID 1039050-8
-0- -0-