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Stora Enso Reports Q2 Results: Operating Profit Declines

Press release from the issuing company

HELSINKI, Finland, July 28 -- Stora Enso today announced that Stora Enso's earnings per share were EUR 0.06 (EUR 0.06 excluding non-recurring items). Operating profit was EUR 58.5 (EUR 103.4 excluding non-recurring items) million, which is EUR 44.9 million less than in the previous quarter and 1.9% of sales. Profit before taxes and minority interests amounted to EUR 49.0 (EUR 80.8 excluding non-recurring items) million. There were no non-recurring items in the second quarter. Sales at EUR 3 102.9 million were up 2.8% on the previous quarter's EUR 3 017.9 million. Cash flow from ongoing operations was EUR 138.5 (EUR 173.2) million and cash flow after investing activities EUR -186.7 (EUR -54.2) million. Cash earnings per share were EUR 0.43 (EUR 0.41). Net financial items were EUR -26.2 (EUR -20.3) million, or -0.02 per share. Market-related production curtailments totalled 98 000 (125 000) tonnes. Outlook Commenting on the outlook, Stora Enso's CEO Jukka Harmala said, "In Europe the economic outlook is more positive than in the first quarter. The economic recovery is still moderate; nevertheless, paper demand, especially in fine paper grades, is improving. Price increases are expected in fine paper grades during the second half of the year. In magazine paper grades demand is improving, but in coated magazine paper the imbalance between supply and demand will keep the pricing environment competitive. Packaging board demand and prices are expected to remain stable. In wood products whitewood supply and demand are expected to stay in balance, but the redwood market will remain oversupplied." In North America print advertising expenditure continues to improve and competing paper imports have moderated. Previously announced price increases in coated and uncoated magazine paper and coated fine paper are being implemented. Speciality paper demand continues to strengthen and price rises have been achieved. Operating rates are expected to remain strong. Stora Enso North America's financial performance is forecast to improve significantly during the second half of the year as a result of the Profit Enhancement Programme and more favourable market conditions. In Asia the markets for fine paper are seasonally slowing down. Prices are stabilising, having increased in the second quarter. The full-length version of the Stora Enso interim review is available on the Stora Enso website at www.storaenso.com/investors or from the following link: http://hugin.info/3034/R/953952/135946.pdf