4/27/01 - Stora Enso achieved good first quarter results in a weakening market. Sales were EUR 3,637.0 million, similar to the last quarter. The operating profit, excluding non-recurring items, was up 19% on the previous quarter at EUR 523 million. The strong operating profit was due to improved prices in magazine paper, newsprint and packaging boards. Capacity utilisation control through production curtailments for market reasons totalled 205,000 tonnes. "All financial targets were well met," says Jukka, CEO of Stora Enso. "We believe the good financial results reflect our high operating efficiency." Earnings per share (EPS) up 11% on the previous quarter EPS was EUR 0.31, up 11% on the previous quarter. The currency effect on the EPS was EUR 0.01. The effects of lower recovered paper prices and higher energy costs were EUR 0.01 and EUR -0.01 per share respectively. In this interim review and for the first time Stora Enso has adopted the new IAS 39 standard for financial instruments. This change has reduced the EPS by EUR 0.06. Stora Enso's hedging policy aims to cover 50% of the next 12 months' net currency exposure. European demand is still fairly stable. European coated fine paper prices are under pressure, but magazine paper prices are still solid. European newsprint supply and demand are in balance. Paperboard market is weakening slightly. Buyers' inventories are generally low and further large-scale de-stocking is unlikely. Demand for sawn timber will remain weak. In North America, coated fine paper and magazine paper demand is expected to remain weak, with prices under pressure. Stora Enso will continue to adjust capacity utilisation as appropriate. The full year financial results will depend very much on the industry's ability to maintain prices, and on internal efficiency and cost awareness. Looking ahead Jukka says, "We expect the rest of the year to be very demanding, but if capacity utilisation continues to be adjusted appropriately and buyers' inventories are as low as estimated, supply and demand balance for paper and board should remain healthy."