Segment Reporting Changes will Increase Transparency and Comparability
HELSINKI, March 21 /Xinhua-PRNewswire/ -- Stora Enso's operating profit in the first quarter of 2008 excluding non-recurring items is expected to be close to the level achieved in the fourth quarter of 2007 and therefore considerably lower than in the first quarter of 2007. This is due to the high costs of already purchased sawlogs, particularly relative to the weakening market in Europe as a consequence of excessive sawlog supplies due to recent storms in Central Europe. Improvements in some business areas are expected to be more than offset by poor results in Wood Products, which will report an operating loss including a negative revaluation of sawlog inventories in the first quarter. There will also be a provision in Wood Supply for weather damage to the Group's plantation in China, which will be reported segmentally under Other.
As already announced, Stora Enso is curtailing Wood Products' production of sawnwood and glue-laminated posts and beams in Austria, the Baltic States and Finland. In view of the weaker market outlook, Stora Enso is planning further curtailments of sawnwood production during the rest of 2008. Owing to the likely effects of the storms, the segment Wood Products will struggle to produce an operating profit for the full year 2008.
The newsprint and book paper price negotiations have nearly concluded. The result is an average price decline, for all newsprint and book paper grades together, of between 3 and 4% in local currencies.
Segment reporting changes
Stora Enso will modify its segment reporting format for operating profit from the first quarter of 2008 onwards: the share of results of associated companies, and accounting items and fair valuations will no longer be included in business segments' operating profits; they will be reported as separate items to increase the transparency of segmental reporting and facilitate comparisons between different periods.
The segment Merchants will be reported as a discontinued operation in the interim report for the first quarter of 2008.
Historical figures for previous periods have been adjusted for these changes in the following tables:
Sales by Segment
EUR million Q1/07 Q2/07 Q3/07 Q4/07 2007
Newsprint and Book Paper 438.7 429.9 430.0 436.3 1,734.9
Magazine Paper 566.6 552.9 587.3 589.5 2,296.3
Fine Paper 577.0 522.8 529.7 526.7 2,156.2
Consumer Board 589.6 570.1 562.1 579.1 2,300.9
Industrial Packaging 266.1 274.2 267.8 275.4 1,083.5
Wood Products 472.3 525.7 461.4 393.7 1,853.1
Other and elimination 90.9 114.3 38.4 180.0 423.6
Continuing Operations 3,001.2 2,989.9 2,876.7 2,980.7 11,848.5
Discontinued operations 1 020.8 963.7 959.7 969.1 3,913.3
Elimination -166.6 -148.4 -151.5 -151.8 -618.3
Total 3,855.4 3,805.2 3,684.9 3,798.0 15,143.5
Operating Profit by Segment excluding non-recurring items (NRI)
EUR million Q1/07 Q2/07 Q3/07 Q4/07 2007
Newsprint and Book Paper 61.1 50.2 52.2 48.4 211.9
Magazine Paper 9.4 8.4 17.5 15.6 50.9
Fine Paper 55.1 38.5 34.4 35.7 163.7
Consumer Board 72.4 29.0 27.0 29.6 158.0
Industrial Packaging 29.2 29.6 24.7 28.4 111.9
Wood Products 54.8 59.3 37.1 -0.5 150.7
Other (Group functions etc.) -11.2 -12.1 -11.1 -25.9 -60.3
Operating Profit excl. NRI by
Segment 270.8 202.9 181.8 131.3 786.8
Share of results of associated
companies excl. fair valuations 24.1 20.0 17.4 12.8 74.3
Operating Profit excl. NRI and
accounting adjustments 294.9 222.9 199.2 144.1 861.1
Non-recurring items -12.0 - -549.4 -388.5 -949.9
Accounting items and fair
valuations 15.7 21.3 44.9 183.8 265.7
Operating Profit (IFRS) 298.6 244.2 - 305.3 - 60.6 176.9
Net financial items -36.1 -53.0 -23.4 -43.5 -156.0
Profit before Tax and Minority
Interests 262.5 191.2 -328.7 -104.1 20.9
Income tax expense -65.4 -42.2 54.7 47.7 -5.2
Net Profit from Continuing
Operations 197.1 149.0 -274.0 -56.4 15.7
Discontinued Operations
Net profit after tax for the
period from discontinued
operations 25.4 -5.1 -167.1 -81.3 -228.1
Net Profit 222.5 143.9 -441.1 -137.7 -212.4
NRI by Segment
EUR million Q1/07 Q2/07 Q3/07 Q4/07 2007
Newsprint and Book Paper -- -- -- -110.0 -110.0
Magazine Paper -- -- -218.0 -231.0 -449.0
Fine Paper -- -- - 32.6 21.0 -11.6
Consumer Board -- -- -186.8 -12.5 -199.3
Industrial Packaging -- -- -5.9 -1.0 -6.9
Wood Products -12.0 -- -106.1 -- -118.1
Other -- -- -- -55.0 -55.0
Continuing Operations -12.0 -- -549.4 -388.5 -949.9
Discontinued operations 44.0 12.8 -- -28.3 28.5
Total 32.0 12.8 -549.4 -416.8 -921.4
Operating Profit by Segment
EUR million Q1/07 Q2/07 Q3/07 Q4/07 2007
Newsprint and Book Paper 61.1 50.2 52.2 -61.6 101.9
Magazine Paper 9.4 8.4 -200.5 -215.4 -398.1
Fine Paper 55.1 38.5 1.8 56.7 152.1
Consumer Board 72.4 29.0 -159.8 17.1 -41.3
Industrial Packaging 29.2 29.6 18.8 27.4 105.0
Wood Products 42.8 59.3 -69.0 - 0.5 32.6
Other 4.5 9.2 -14.2 -116.1 -116.6
Share of result of associated
companies 24.1 20.0 65.4 231.8 341.3
Operating Profit (IFRS) 298.6 244.2 -305.3 -60.6 176.9
Net financial items -36.1 -53.0 -23.4 -43.5 -156.0
Profit before Tax and
Minority Interests 262.5 191.2 -328.7 -104.1 20.9
Income tax expense -65.4 -42.2 54.7 47.7 -5.2
Net Profit from Continuing
Operations 197.1 149.0 -274.0 -56.4 15.7
Discontinued Operations
Net profit for the period
from discontinued operations 25.4 -5.1 -167.1 -81.3 -228.1
Net Profit 222.5 143.9 -441.1 -137.7 -212.4
About Stora Enso
Stora Enso is an integrated paper, packaging and forest products company producing newsprint and book paper, magazine paper, fine paper, consumer board, industrial packaging and wood products. Stora Enso's sales totalled EUR 13.4 billion in 2007. The Group has some 38 000 employees in more than 40 countries on five continents. Stora Enso has an annual production capacity of 13.1 million tonnes of paper and board and 7.5 million cubic metres of sawn wood products, including 3.2 million cubic metres of value-added products. Stora Enso's shares are listed in Helsinki and Stockholm.
