Stora Enso announced yesterday (18 June) that its second-quarter 2008 operating profit is expected to be around half the €223m (£175m) that it achieved in the same quarter last year.

It is also predicting its profitability in the second half of 2008 to be negatively affected by the impact of rising fossil fuel prices on energy, transportation and chemical costs.

In a statement, the paper giant said: "After three quarters of deteriorating performance, combined with the uncertain macro-economic outlook, Stora Enso is reviewing its plans for production curtailments in the second half of 2008, as well as permanent capacity reductions."

UPM has also said it expects its full-year operative profitability for 2008 to be below last year, citing higher than estimated costs of wood fibre sourcing. 

The magazine paper manufacturer has been involved with on-going price increases for its magazine papers.

Its financial results for April-June will be released on 24 July this year.

Earlier this week, it cited weakening results for its sawn timber business due to uncertainty over raw material supply and has said it will start staff negotiations over the possible closure of its Leivonmäki sawmill.

UPM produces printing papers for magazines, newsprint and fine papers and has already responded to the weaker markets and reduced its sawmilling over spring and summer.

Located in central Finland, the Leivonmäki mill produces spruce sawn timber and employs 63 staff. It has generated constant losses, according to the company.