The Norwegian paper manufacturer reported EBITDA operating earnings of Norwegian Kroner – NOK – 922m (£95.4m) in the fourth quarter of 2008, up from NOK 712m in Q3.

However, EBITDA operating earnings for the full year 2008 were NOK 2.7bn, down from NOK 3.9bn in 2007.

Chief executive Christian Rynning-Tønnesen said: "We have seen a positive development throughout 2008. Our production is now more cost-efficient and important input factors have become more reasonably priced."

In addition, a significantly weaker NOK through the latter half of 2008 had a "very beneficial effect" for the company. 

However, the company posted a loss of NOK 2.8bn for the full year, compared with a loss of NOK 683m for the year 2007.

Over the past two years, the company has implemented a restructuring programme that concluded at the end of 2008.

Rynning-Tønnesen said the programme had been "absolutely necessary" to counter the severe cost increases across the business.

However, newsprint demand is still expected to be lower in 2009 than in 2008, and Norske Skog will curtail its capacity in Europe 200,000 tonnes in 2009.

Magazine paper production capacity will also be reduced by around 75,000 tonnes throughout the year. 

Regarding the possible sale of the company's Chinese mills, it said that while preliminary processes have started, it would not comment further at this stage.

In March last year, Norske Skog was the subject of merger speculation and was believed to be on the verge of a sale to a Scandinavian rival.

Tom Bratlie, vice president of corporate affairs, said: "We have stated on several occasions that the industry needs consolidation, and that we want to play a role in this when and if it takes place.

"Having said that, we must of course focus on improving what is within our control at present – our operations based on the company we are today."