HELSINKI, Finland, Dec. 21, 2005 (PRIMEZONE) -- Stora Enso (NYSE:SEO) today announced that Stora Enso's profitability improvement programs are progressing faster than anticipated. The Profit 2007 program, with pre-tax profit improvement of EUR 300 million net, will have approximately EUR 50 million of provisions recorded in the fourth quarter 2005, mainly for redundancy costs. As previously announced, provisions of approximately EUR 310 million related to asset closures under the Asset Performance Review (APR) will also be recorded in the fourth quarter of 2005.
In addition, approximately EUR 30 million mainly due to redundancies at the four mills under scrutiny will be recorded as a non-recurring item in the last quarter of 2005. There will also be approximately EUR 40 million of asset write-downs due to additional restructuring during the fourth quarter of 2005, mainly in the Wood Products segment.
In summary, the fourth quarter 2005 non-recurring items will total approximately EUR 430 million. These provisions will have a cash impact of approximately EUR 160 million that will be incurred as the payments become due, mainly during 2006. However, there will be no cash impact in the fourth quarter of 2005.
The Company still expects operating profit excluding non-recurring items to be higher in the fourth quarter than the third quarter of 2005. Uncertainty in the timing of deliveries from Finnish mills over the year-end holiday period may result in some revenue being credited to the year 2006, instead of 2005. The ten-day strike at Langerbrugge Mill, Belgium in November will have a negative impact on the fourth quarter results.
These figures are unaudited.
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 an annual production capacity of 16.4 million tonnes of paper and board and 7.7 million cubic metres of sawn wood products, including 3.2 million cubic metres of value-added products. Stora Enso's shares are listed in Helsinki, Stockholm and New York.
Stora Enso Oyj Business ID 1039050-8