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Stora Enso reports 1Q: Demand for paper improving gradually

Thursday, April 29, 2004

Press release from the issuing company

HELSINKI, Finland, April 28 -- Stora Enso today announced that Stora Enso's earnings per share excluding non-recurring items were EUR 0.06 (EUR 0.00). Operating profit excluding non-recurring items was EUR 103.4 (EUR 77.4) million, which is 33.6% more than in the previous quarter and 3.4% of sales. Profit before taxes and minority interests excluding non-recurring items amounted to EUR 80.8 (EUR 4.8) million. Sales at EUR 3 017.9 million were similar to the previous quarter's EUR 3 028.8 million. Cash flow from operations was EUR 173.2 (EUR 579.7) million and cash flow after investing activities EUR -54.2 (EUR 190.5) million. Cash earnings per share excluding non-recurring items were EUR 0.41 (EUR 0.35). Net financial items were EUR -20.3 (EUR -121.7) million. Market-related production curtailments totalled 125 000 tonnes (210 000 tonnes). 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) EUR -54.0 million included in net financial items 4) CEPS = (Net profit for the period + depreciation and amortisation )/average number of shares Outlook Commenting on the outlook, Stora Enso's CEO Jukka HC$rmC$lC$ said, "In Europe economic recovery has been slow. However, demand for paper has increased and this seems to be stabilising prices for most paper grades and making some price increases possible. Packaging board prices are generally firm. In wood products there is good demand for whitewood and prices are stable, but an oversupply of redwood is causing prices to fall." In North America demand for paper is improving gradually. Despite the low value of the dollar, imports from Europe and Asia continue, though at a slower rate than earlier. The coated fine paper market is expected to improve slowly and price increases have been announced. The magazine paper market is improving and price increases are expected to be implemented during the second quarter. Asian economies are growing rapidly and sustaining good levels of paper and packaging consumption. Prices for some grades are increasing in local currencies. Provided that market conditions continue to improve, the Group's results are expected to benefit, but only in the latter part of the year. The net effect of the restructuring of forestland ownership in Sweden will be about EUR -40 million after net financial items on an annual basis. The second quarter results will as usual be adversely impacted by Midsummer holiday shutdowns, especially in Finland, and by a major rebuilding of fine paper machine 97 at Kimberly Mill as part of Stora Enso North America's Profit Enhancement Programme.




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