President Leif Brodn said earnings were in line with the previous year, the difference was estimated costs of closing its Lenhodva sawmill.

"The outlook for the second half of the year continues to be strong," he said.

Improvements in international market conditions contributed to increased demand for pulp and paper.

Price for Sdra's bleached long fibre pulp increased over the six months from $560 per tonne to $655 per tonne at the end of June.

The increase in turnover was due primarily to higher volumes of wood raw material, pulp and sawn products, as well as strong demand for the group's products.

At Sdra's five pulp mills just over 1m tonnes of pulp was produced during the six-month period, an increase of 3% on the 2003 levels.

The Swedish pulp mills of Mrrum and Vr both achieved their highest monthly production figures during the period.

Story by Andy Scott