The Finnish producers operating profit fell 32% in the first quarter to 73m (E118.8m), due to lower selling prices and the divestment of its interest in MD Papier last June.

Turnover fell 6% to 1.07bn for similar reasons, while profit before extraordinary items fell 47% to 38m.

Despite the falls, Jaakkola thought the group had responded well to adjusting its business to suit market conditions, and was in a good position for when demand picks up again.

M-real has decided to sell its 50% holding in German producer Papierfabrik Albbruck to Myllykoski Group, following the termination of the groups sales agreement with Myllykoski (PrintWeek, 1 March). The transaction will be carried out during the second quarter.

Executive vice president Veli-Matti Mynttinen said the group would focus on increasing cashflow and reducing debt, and he hoped to see a turnaround in the advertising sector, which will benefit M-real.

The Map Merchant Group arm of M-real despite turning around a 9m operating loss for the fourth quarter of 2001 to a 742,000 profit for the first quarter of 2002 reported operating profits down 87% on the same time last year.

The turnaround in profit was due to 12m of non-recurring expenses at the end of the previous quarter, resulting from the restructuring of some of its UK operations and warehouses, along with write-downs on assets.

Map Merchants turnover also fell 7% to 253m, with delivery volumes down 6% on the same period last year to 341,000 tonnes.

Story b y Andy Scott