Sales for the quarter were €2.35bn (£1.87bn), down 4% from €2.46bn the same time a year earlier. Pre-tax profit was a loss of €90m for the quarter, down from a profit of €144m for the quarter last year.

However, operating profit excluding special items improved from €195m in the third quarter of 2007 to €216m for the third quarter this year.

President and chief executive Jussi Pesonen has also said the company's competitive energy and pulp assets have also contributed to the better result.

He said: "The recent weakening of the euro improves our profitability in all export markets. Proactive and timely capacity closures in magazine papers, newsprint and fine papers improved the market customer mix of our paper business."

In September, UPM revealed it will reorganise its business structure and streamline operations.

It has planned for the possible closure of its Finnish-based Kajaani paper mill and Tervasaari pulp mill by the end of 2008. The restructuring measurements will affect around 1,600 staff in 2009-2010.

UPM has also said it also has plans to "temporarily reduce" its sawmilling and plywood production capacity in 2009, which will affect 800 staff.

Pesonen said: "The demand for our products is not immune to the economic slowdown.

"However, we are confident the internal restructuring and savings programme that we have successfully implemented will give us competitive advantage in this extremely challenging financial environment."

UPM has also said as of 1 December 2008 it will adopt a new business structure, which will consist of three business groups: energy and pulp, paper, and engineered materials. It said it hopes this will help it leverage its competitive advantage.