It pinpointed advertising-driven paper grades as products that had particularly hindered growth, as well as depressed prices from over-supply and weakness in the US dollar.
It did move back in the black with pre-tax profits of 46.9m. However, in Q3 of 2002 it took a 736m one-time charge from a profit enhancement plan (PrintWeek, 30 August 2002).
The groups third-quarter pre-tax profits actually fell 22.3% compared to the second quarter of this year, although the figure included another non-recurring item of 27.7m, comprising restructuring charges and its cost-reduction programme.
Sales of publication papers fell 6.33% on the same time last year to 754.4m, although Stora said there had been some growth in coated magazine papers. Fine Paper sales were also down 5.7% to 547.6m, but sales in the groups packaging board division rose 2.3% to 479.9m.
UPM-Kymenne said its profits continued to be poor due to the low price level in the paper markets.
The groups turnover for the three months to the end of September fell from 1.82bn this time last year to 1.7bn, while profit before extraordinary and non-recurring items was less than half of last years figure at 89m.
Sales of magazine papers fell, as did those of newsprint and fine and speciality papers.
President and chief executive Juha Niemel said UPM had offset the fall in paper prices by improving efficiency and making cost savings. The group has made more than a third of the planned 140m in savings to date.
Economic recovery seemed more likely in North America than in Europe, where there were still rather weak signals pointing to improving growth, he said.
UPM has also started to implement price increases for magazine papers in the UK and North America, although the fine paper market remains challenging.
Story by Rachel Barnes
