Stora Enso and UPM-Kymmene have both announced falls in pre-tax profits for January to September 2001, and reported record production downtime due to market conditions.

"The market continues to be difficult but these results are in line with our expectations," said Stora Enso chief executive Jukka Hrml.

Both companies said the sluggish market would continue early 2002.

Stora Ensos net profits before tax fell 25% to 600m (E965m), although sales rose 9% to 6.3bn.

UPM-Kymmene reported a 38% fall in pre-tax profits to 536m, while sales dropped 5% to 4.5bn.

Hrml said prices had fallen considerably more in the US than in Europe due to the continuing weakness of the US economy and the events of 11 September.

European demand for SC and uncoated fine paper is expected to remain healthy, despite some decline in both markets, but Stora Enso and UPM-Kymmene said the normal seasonal upturn would be smaller due to falling advertising revenue.

Stora Ensos third-quarter production cutbacks totalled 706,000 tonnes. Weak demand accounted for 507,000 tonnes, while the remainder was due to machine rebuilds.

Hrml said Stora Enso would take more downtime in the fourth quarter, but this would be due to normal seasonal conditions and further rebuilding projects.
"We will continue with our policy of adjusting capacity to demand," he added.

Story by Andy Scott