This was despite the group suffering a 5% fall in net sales to 4bn compared to the same period last year.

"A lot of the internal programmes we have undertaken are paying off, and we continue to be engaged in a rationalisation and realisation programme to reduce our costs," said a spokeswoman.

The company said it did not see any significant improvement in sales or volumes over the period, with volume relatively flat and pricing substantially down.

"Any sign of an economic recovery remains uncertain. We will continue to focus on improving our costing structure, in particular our internal costs," said the spokeswoman.

Net earnings for the second quarter totalled 136m, compared with a net loss of 107m for the same period in 2001.

Operational improvements resulted in a rise of 39% for net earnings for printing papers to 67m.

During the period IP incurred a pre-tax charge of 50m for facility closures and related severance costs, and a net 17.7m gain before taxes and minority interests related to sales and expenses of businesses held for sale.

Although the spokeswoman would not comment on the companys future plans, she said IP was "always looking for further market opportunities and possible acquisitions".