For the fourth quarter, Stora Enso’s operating profit excluding non-recurring items was EUR80.5m, 42.4 per cent less than in the previous quarter and 2.7 per cent of sales. Profit before taxes and minority interests excluding non-recurring items amounted to EUR7.8m.
Non-recurring items in the operating profit caused an operating loss of EUR14.5m due to the write-down for the expected capital loss on the sale of forestland in Ontario, Canada. Non-recurring items in net financial items totalled EUR54m due to the provision for the expected losses from the termination of the US cross-border leasing contracts.
Sales of EUR3.03bn were 1.4 per cent higher than the previous quarter’s EUR2.99bn. Cash flow from ongoing operations was EUR579.7m and cash flow after investing activities was EUR190.5m.
For the full year, sales decreased by EUR610.3m to EUR12.17bn, a decline of 4.8 per cent. Operating profit excluding non-recurring items decreased by EUR388.4m, or 41.9 per cent to EUR538.1m. Earnings per share were EUR0.25 and cash earnings per share EUR 1.64, both excluding non-recurring items.
Cash flow from operations totalled EUR1.81bn, with cash flow after investing activities amounting to EUR615m.
Commenting on the outlook, Jukka Härmälä, Stora Enso CEO says, “In Europe growing confidence in the economic recovery is expected to increase demand for advertising-driven paper. Pressure on prices still persists in magazine paper grades, and newsprint prices will at best maintain last year’s levels. Prices for packaging boards are rather stable, while fine paper prices seem to be stabilising at low levels. Demand for wood products is fairly good, but prices are under pressure. The weak US dollar and increasing competition will continue to have an adverse effect on the Group’s European operations.”
Härmälä says that the economy in North America is recovering, but that has only marginally increased the demand for paper. There are some signs now that demand is increasing, and this is expected gradually to affect paper prices during the second half of 2004. In coated fine paper oversupply persists in the form of imports, mainly from Asia. Stora Enso North America’s results for the first quarter of 2004 will be negatively impacted by the major rebuilding of fine paper machine 16 at Wisconsin Rapids.
In China the economy is growing rapidly and boosting the demand for fine paper and packaging boards.
The Group’s intensified savings measures that started in 2003 are proceeding according to plan. The objective remains to keep the capital expenditure in the 2003-04 period in line with the Group’s depreciation charges.
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