OPERATING RESULT EXCLUDING NON-RECURRING ITEMS IMPROVED TO EUR 11.1 MILLION

M-real Corporation Stock Exchange Bulletin 29.10.2004 at 1.00 p.m.
1(20)

OPERATING RESULT EXCLUDING NON-RECURRING ITEMS IMPROVED TO EUR 11.1
MILLION

In the third quarter, M-real Group’s operating result, excluding non-
recurring items, rose to a profit of EUR 11.1 million from a loss of
EUR 19.9 million in the previous quarter.  Compared with the second
quarter, the operating result was improved mainly by the growth in
the volume of paper delivered. In addition, profitability in the
previous quarter was burdened by the costs of annual maintenance
shutdowns.

Included as non-recurring items in the operating result were write-
downs on fixed assets of the Savon Sellu fluting mill in Finland and
the Reflex paper mill in Germany, to a total value of EUR 53.5
million, as well as the recognition of negative goodwill of EUR 14.3
million connected with the purchase of shares in Kemiart Liners Oy.
The operating result was a loss of EUR 28.1 million (a loss of 19.9
million).

Key figures for the third quarter:
- Operating result, excluding non-recurring items: a profit of EUR
11.1 million (a loss of 19.9 million in the previous quarter)
- The result before extraordinary items and excluding non-recurring
items was a loss of EUR 20.3 million (a loss of 49.6 million).
- Operating result: a loss of EUR 28.1 million (a loss of 19.9
million)
- The result before extraordinary items was a loss of EUR 59.5
million (a loss of 49.6 million)
- Earnings per share: EUR 0.34 negative (0.18 negative)
- Result for the report period: a loss of EUR 62.1 million (a loss of
31.5 million).
- Cash flow from operations: EUR 77.0 million (0.7 negative)
- Return on capital employed: 1.9 per cent negative (1.0 negative)
- Turnover: EUR 1,362.7 million (1,333.3)
- Equity ratio at the end of the period: 37.2 per cent (35.8)
- Key figures adjusted for the effects of the rights issue: equity
ratio: 41.9 per cent, gearing: 81 per cent, interest bearing net
debt: EUR 2 189 million
- Capacity utilisation rate at the paperboard mills: 96 per cent
(86); capacity utilisation rate at the paper mills: 89 per cent (86)

All businesses except for Map Merchants reported an improved
operating result, excluding non-recurring items. The improvement in
profitability was due mainly to the growth in delivery volumes.

The growth in paper demand continued in the third quarter. M-real’s
deliveries of paperboard also remained at the good level seen in the
first half of the year and production capacity was nearly in full
use.

During the quarter the price of coated and uncoated fine paper fell
slightly and the price of coated magazine paper remained at nearly
the previous quarter’s level.

“Thanks to continued strong demand, we are still confident in our
ability to implement price increases for both coated and uncoated
fine papers, although the effect of this on 2004 is likely to be
minorö, said Senior Executive Vice President & COO Hannu Anttila,
commenting on the market situation. “In respect of folding boxboard,

we have announced our intention to raise prices before the end of the
year, but for coated magazine papers, the more significant price
increases are considered from the beginning of 2005.ö

öThe 200 million euro cost reduction and profitability improvement
programme, which was announced in the beginning of the year, proceeds
as plannedö, Anttila states.

“Although demand will probably hold up well, the seasonal variation
will lower delivery volumes, and the fourth-quarter result, excluding
extraordinary items, will be weaker than the third quarter,ö was
Anttila’s estimate of the near-term outlook.

M-REAL CORPORATION

Corporate Communications

For further information contact Hannu Anttila, Senior Executive Vice
President and COO, tel. +358 10 469 4343 or Juhani Pöhö, Senior Vice
President and CFO, tel. +358 10 469 5283.
M-REAL CORPORATION

INTERIM REPORT  1 JANUARY – 30 SEPTEMBER 2004

JULY-SEPTEMBER EARNINGS COMPARED WITH THE PREVIOUS QUARTER

In the third quarter, M-real Group’s operating result was a loss of
EUR 28.1 million (Apr.-June 2004: a loss of EUR 19,9 million). The
operating result includes write-downs on fixed assets of the Savon
Sellu fluting mill in Finland and the Reflex paper mill in Germany,
to a total value of EUR 53.5 million, as well as the recognition of
EUR 14.3 million of the negative goodwill connected with the purchase
of shares in Kemiart Liners Oy. The operating result, excluding non-
recurring items, was EUR 11.1 million. The operating result was
improved mainly by the growth in the volumes of paper delivered.
Kemiart Liners is totally included in the figures of the third
quarter. In addition, profitability in the previous quarter was
burdened by the costs of annual maintenance shutdowns.

All the businesses except for Map Merchants reported an improved
operating result, excluding non-recurring items.

Deliveries of paperboard to customers totalled 310,000 tonnes
(275,000 tonnes). Because of the inbalance between supply and demand,
production was curtailed by 7,000 tonnes (21,000) in line with
demand. The capacity utilisation rate at the mills was 96 per cent
(86). Kemiart Liners is included in its entirety in the third-quarter
figures.

Paper deliveries from the mills totalled 1,043,000 tonnes (995,000).
Production curtailments amounted to 85,000 tonnes (104,000). The
capacity utilisation rate at the mills was 89 per cent (86).

The effect of currency hedging on the operating result was a gain of
EUR 4.1 million (a loss of 3.2 million). At the end of September, the
exchange rate of the United States dollar against the euro was 2.1
per cent lower and the rate of the British pound against the euro 2.4
per cent lower than at the end of June. On average, the dollar
weakened by 1.4 per cent and sterling by 0.8 per cent compared with
the previous quarter.

Turnover was EUR 1,362.7 million (1,333.3). Comparable turnover was
up 1.6 per cent.

Financial income and expenses were EUR 31.4 million negative (29.7
million negative). The figures include EUR 31.4 million of net
interest and other financial expenses (28.9). In the comparison
period, financial income and expenses furthermore included EUR 0.8
million of exchange losses on financial items.

Other operating income amounted to EUR 23.9 million (24.1). The sum
does not include non-recurring items.

The result before extraordinary items was a loss of EUR 59.5 million
(a loss of 49.6 million). The result, excluding the above-mentioned
non-recurring items, was a loss of EUR 20.3 million (a loss of 49.6
million)

The result for the report period was a net loss of EUR 62.1 million
(a net loss of 31.5 million). Taxes, including the change in the
imputed deferred tax liability, were EUR 1.7 million (18.4 negative).
Taxes in the previous quarter were reduced by the EUR 21.4 million
decrease in the imputed deferred tax liability resulting from the
lowering of Finland’s corporate tax rate from 29 per cent to 26 per
cent.

Earnings per share were EUR 0.34 negative (0.18 negative).

The return on capital employed was 1.9 per cent negative (1.0
negative). The return on equity was 10.6 per cent negative (5.4
negative).

EARNINGS IN JANUARY-SEPTEMBER COMPARED WITH THE SAME PERIOD OF 2003

The operating result in the January-September period was a loss of
EUR 47.2 million (a profit of 111.1 million). The operating result,
excluding non-recurring items booked in the third quarter, was a loss
of EUR 8.0 million (104.1). Profitability was weakened above all by
the lower selling price of paper as well as the 10 per cent average
fall in the exchange rate of the US dollar. The operating result was
also reduced by the divestment of Metsä Tissue in January 2004.

Apart from Cartons, the operating result excluding non-recurring
items of all the businesses weakened.

Deliveries of paperboard to customers totalled 850,000 tonnes
(757,000 tonnes). Production was curtailed by 65,000 tonnes in line
with demand (111,000). The capacity utilisation rate was 90 per cent
(86). Kemiart Liners is totally included in the figures of the third
quarter.

The total volume of paper deliveries was 3,059,000 tonnes
(2,902,000). Production curtailments amounted to 299,000 tonnes
(424,000). The capacity utilisation rate of the paper mills was 88
per cent (85).

Turnover was EUR 4,077.5 million (4,569.9). Turnover decreased by the
same factors as impacted the operating result. Comparable turnover
was down 0.7 per cent.

The consolidated result before extraordinary items was a loss of EUR
137.4 million (a profit of 25.0 million). The result before
extraordinary items, excluding non-recurring items booked in the
third quarter, was a loss of EUR 98.2 million (a profit of 9.8). The
result for the comparison period included a total of EUR 15.2 million
of non-recurring income, of which EUR 8.2 million was entered in
financial income and expenses.

The result of the reporting period was a profit of EUR 48.8 million
(a profit of EUR 1.0 million).

PERSONNEL

The number of personnel at the end of September was 16 392 employees
(19,636 employees at 31 December, 2003), of which 5 212 employees
worked in Finland (5,835). The net reduction in personnel was 3,244
employees. Acquisitions and divestments resulted in a net decrease of
3,111 employees in the reduced headcount.

The Group’s payroll includes 47 per cent of Metsä-Botnia’s employees.

CAPITAL EXPENDITURES

Capital expenditures on fixed assets totalled EUR 143 million in
January-September (Jan.–Sept. 2003: 136). In addition, EUR 16 million
was paid for the shares of companies that were acquired. In the
comparison period, EUR 154 million was paid for the shares of
companies that were acquired.

The investment project for the new BCTMP mill in Kaskinen, which will
have a total price tag of EUR 180 million, is progressing according
to plans. The earthworks at the mill site have been completed and
construction of the plant building is in progress. The mill will have
an annual capacity of 300,000 tonnes of bleached BCTMP pulp and is
set to come on stream in August 2005.


ACQUISITIONS, DIVESTMENTS AND RESTRUCTURING

At the beginning of January, a 66 per cent stake in Metsä Tissue was
sold to Metsäliitto Osuuskunta in accordance with a Letter of Intent.
In addition, 17 per cent was sold to the Tapiola Group. At the end of
January, the remaining 17 per cent was sold to Varma Mutual Pension
Insurance Company (9.86 per cent) and Sampo Life Insurance Company
Limited (7.14 per cent). The transactions were carried out on the
same terms and conditions and were based on a debt-free value of EUR
570 million. The after-tax capital gain on the disposals was about
EUR 173 million.

The holdings of Metsäliitto Osuuskunta and UPM-Kymmene in Kemiart
Liners Oy (a total of 53% of all the shares in the company) were
purchased at the beginning of August for about EUR 13 million. In
addition, the M-real Group's interest-bearing net debt increased by
about EUR 23 million. The EUR 14.3 million negative goodwill that
arose via the transaction was recognized as income in the third
quarter.

In a deal that entered into effect at the end of September, the Price
& Pierce trading business was sold to Gould Paper Corporation. The
transaction does not have a major economic effect on M-real.

FINANCING

Interest-bearing net liabilities amounted to EUR 2,278 million at the
end of September (Dec. 2003: 3,109 million).

The equity ratio was 37.2 per cent (Dec. 2003: 31.9) and the gearing
ratio 100 per cent (Dec. 2003: 137).

Liquidity is good. Liquidity at the end of September was EUR 1,921
million, of which EUR 1,719 million consisted of binding long-term
credit commitments and EUR 201 million represented liquid funds and
investments. In addition, to meet its short-term financing needs, the
Group had at its disposal non-binding domestic and foreign commercial
paper programmes and credit facilities amounting to about EUR 600
million.

At the end of the report period an average of 4 months of net foreign
currency exposure was hedged. The degree of hedging during the period
has varied between 4 and 5 months. At the end of the period, about
101 per cent of the shareholders’ equity not in euros was hedged. At
the end of the period the Group’s liabilities were tied to fixed
interest rates for a period of 19 months. During the report period
the interest rate maturity has varied from 18 to 24 months.

In July, Moody’s Investors Services placed M-real on Credit Watch
Negative for a possible lowering of its credit rating.

After the end of the review period, M-real has authorized five banks
to act as the lead managers of a syndicated loan of EUR 500 million
that will replace the syndicated loan of EUR 700 million maturing in
July 2005. At present, none of this loan has been drawn down. At the
time of writing, it is estimated that the final loan agreements will
be signed by the end of the year.

SHARES

The highest share issue-adjusted price of the M-real Series B share
on the Helsinki Stock Exchange in January–September was EUR 6.43, and
the low was EUR 4.18, with an average share price of EUR 5.98. In
2003 the average price was EUR 6.11. The price of the Series B share
was EUR 4.65 at the end of the report period on 30 September, 2004.

Turnover of the Series B share was EUR 719 million, or 85 per cent of
the shares outstanding. The market value of the Series A and B
shares, calculated on the number of shares prior to the rights issue,
was EUR 833 million at 30 September, 2004.

At 30 September 2004, Metsäliitto Osuuskunta owned 38.5 per cent of M-
real Corporation’s shares, and the voting rights conferred by these
shares was 64.2 per cent. International investors owned 36.7 per cent
of the shares.

On 7 September 2004, the Board of Directors decided, on the basis of
an authorization granted by the extraordinary meeting of shareholders
on 6 September, 2004, to arrange a rights issue to an amount of EUR
447,498,561. The subscription period for the shares commenced on 15
September, 2004 and ended on 1 October, 2004. The subscription price
was EUR 3.00 per share. Each M-real shareholder was entitled to
subscribe for five (5) new Series B shares for each six (6) Series A
or B shares which the shareholder owned on the record date, 10
September, 2004. The subscription rights were traded publicly on the
Helsinki Stock Exchange from 15 to 24 September 2004 and turnover in
them amounted to EUR 63 million, or 49 million warrants. The high for
the subscription warrant was EUR 1.60 and the low EUR 1.11. According
to the final outcome of the rights issue, 148,633,415 Series B shares
were subscribed for on the basis of the subscription warrants in the
primary offering, corresponding to 99.64 per cent of the total amount
of offered shares. In addition, subscription commitments for
31,098,942 Series B shares were submitted in the secondary offering,
exceeding the number of shares being offered (532,772 shares) nearly
60-fold.

The shares subscribed for in the primary offering were accepted for
public trading on the Helsinki Stock Exchange as interim shares on 4
October, 2004 (“M-real B New Sharesö). The corresponding increase in
the share capital was entered in the Trade Register and the interim M-
real B New Shares were combined with M-real’s present Series B share
class on 7 October, 2004. The increase in the share capital
corresponding to the subscriptions accepted in the secondary offering
was entered in the Trade Register on 13 October, 2004.
Following the registration of the shares subscribed for in the
secondary offering, M-real’s share capital is EUR 557,881,540.40 and
consists of 328,165,612 shares, of which 36,340,550 are Series A
shares and 291,825,062 are Series B shares.

The net increase in shareholders’ equity resulting from the rights
issue was EUR 430 million. The share capital rose by EUR 253.6
million to EUR 557.9 million.
The following table presents the effects of the rights issue on
shareholders´ equity as of 30 September, 2004:

EUR million         Shareholders’      Offering   Shareholders’
                   equity as of 30               equity as of 30
                      September                     September
                    excluding the                 including the
                   effects of the                 effects of the
                      offering                       offering
Share capital                  304.3      253.6              557.9
Share premium                  472.9      193.9              666.8
account
Revaluation                    104.6        0.0              104.6
reserve
Reserve fund                     1.7        0.0                1.7
Other                        1,357.9      -17.5            1,340.4
shareholders’
equity
                                                                  
Shareholders’                2,241.4      430.0            2,671.4
equity, total
                                                                  
Key figures                                                       
Equity ratio, %                 35.2                          41.9
Gearing, %                       115                            81
Interest bearing                                                  
net liabilities              2 619.2                       2 189.2
Equity per                     12.52                          8.14
share, EUR
Number of shares         178,999,425 149,166,18        328,165,612
                                              7
                                                

The proceeds of the rights issue have been used to reduce the
company´s indebtedness.

The Board of Directors does not have current authorizations to carry
out share issues or issues of convertible bonds or bonds with
warrants.

REVISED STRATEGY, NEW ORGANIZATION AND CORPORATE EXECUTIVE BOARD

The revised business strategy and renewed business-area and
organizational structure were announced in August.

The core business areas are Consumer Packaging, Publishing,
Commercial Printing and Office Papers. The development possibilities
of the Map Merchant paper merchanting business and the related
potential for carrying out ownership arrangements are being assessed.

The company’s main objective over the next few years is to achieve a
clear improvement in profitability and internal efficiency.

The financial targets set were a return on capital employed of on
average 10 per cent aover a business cycle and a gearing ratio that
is to exceed 100 per cent. Total capital expenditures, including any
acquisitions, will come to a maximum equal to about the amount of
depreciation in 2005 and 2006.

According the revised business area and organizational structure, the
management of each business area has total responsibility for the
operations of the businesses including sales, marketing and
production. In addition, management is responsible for implementing
its business area’s strategy and for profitability as well as for the
return on capital employed.

Within the new organization, the heads of the business areas are
members of the Corporate Executive Board. The tasks of the Corporate
Executive Board are, among other things, to assess the strategy of
each business area and the strategic investments, taking into account
the company’s financial targets.

The new organization came into effect on 1 September, 2004.

PRELIMINARY ESTIMATE OF THE IMPACT OF ADOPTING IFRS ACCOUNTING
STANDARDS

M-real will make the transition from Finnish Accounting Standards
(FAS) to International Financial Reporting Standards (IFRS) in its
financial reporting as from the beginning of 2005. In August the
company published an advance estimate of the financial effects of
making the transition to IFRS.


NEAR-TERM OUTLOOK

The European economy has been slow to recover in 2004. Most of the
indicators of the overall trend in the European economy are pointing
towards a continuation in growth of approximately the current level.
In the United States and Asia, on the other hand, economic growth has
remained robust, though there are signs that growth is tapering off.
The market price of crude oil has risen to a record level during the
report period, raising the costs of industrial production. In
addition, a further weakening of the US dollar would influence
negatively on the competitiveness of the Western European forest
industry.

The growth in demand for paper continued in the third quarter. M-
real’s paper deliveries to all the main markets increased, though
production capacity was still underused. M-real’s deliveries of
paperboard remained at a good level and production capacity was
nearly in full use. Demand for paper and paperboard is expected to
hold up well in the last quarter of the year, but seasonal variation
is likely to reduce delivery volumes compared with the third quarter.
By the end of the year, prices of paper and folding boxboard are
forecast to be at a somewhat higher level than in the third quarter.

Because of the high market price of crude oil, the prices of the oil-
based raw materials used in M-real’s products have risen, and this
will have a negative impact on earnings in the last quarter.

M-real's fourth-quarter result before extraordinary items and
excluding non-recurring items is forecast to be seasonally weaker
than the third quarter.


Espoo, 29 October, 2004


BOARD OF DIRECTORS


BUSINESSES AND MARKET TRENDS

Cartons

                      III    II I 04    IV   III    I-   I-   II-III
                       04    04         03    03   III  III       04
                                                    04   03
                                                              change
Turnover             237.  210. 204.  196.  200.  651. 612.   +13.1%
                        6     1    1     2     3     8    8
Operating result     10.7   9.8 14.0  -2.3  15.1  34.5 35.7    +9.2%
Operating result, %   4.5   4.7  6.9  -1.2   7.5   5.3  5.8         
Return on capital     5.6   4.9  6.7  -1.1   7.1   5.7  5.5         
employed, %
Deliveries, 1,000 t   310   275  265   250   246   850  757   +12.7%
Paperboard            322   242  253   217   238   817  696   +33.1%
production, 1,000 t
Capacity               96    86   89    79    87    90   86         
utilisation rate, %


The operating result of the Cartons business was a profit EUR 10.7
million (a profit of EUR 9.8). The operating result includes write-
downs of EUR 22.4 million on the fixed assests of the Savon Sellu
fluting mill as well as the recognition of negative good will of EUR
14.3 million connected with the purchase of shares in Kemiart Liners
Oy. The operating result excluding non-recurring items was a profit
of EUR 18.8 million (a profit of 9.8). Profitability was improved
mainly by lower fixed costs. The average capacity utilisation rate of
the paperboard machines was 96 per cent (86). The average order book
at the end of September was just under three weeks. Kemiart Liners is
totally included in the figures of the third quarter.

Deliveries by west European folding boxboard producers totalled were
at the level of the previous quarter. M-real’s folding boxboard
deliveries, excluding the growth in deliveries, which are due to the
Kemiart Liners transaction were at the previous quarter’s level. No
major change took place in the selling price of folding boxboard.

The delivery volume of linerboard was at the previous quarter’s level
excluding the growth impact caused by the Kemiart Liners acquisition.
There was no significant change in selling prices.

The delivery volume of fluting increased from the previous quarter.
The delivery volume and selling price were increased especially in
lower profitability markets outside Europe.

The Cartons business reported an operating profit in January-
September of EUR 34,5 million (35.7). The operating profit, excluding
the non-recurring items mentioned above, was EUR 42.6 million (35.7).
The operating profit was improved by the growth in delivery volumes
in all product groups as well as by the realized cost savings. The
strengthening in the euro depressed the euro-denominated selling
price within all product groups. Kemiart Liners is included in its
entirety in the third-quarter result.
                  
Graphics products and Speciality papers

                      III    II I 04    IV   III  I-III    I-    II-
                       04    04         03    03     04   III    III
                                                           03     04
                                                               chang
                                                                   e
Turnover             589.  581. 591.  572.  578.  1,761  1,77   +1.4
                        5     1    1     6     7     .7   5.4
Operating result        -     -  2.5     -  10.0  -42.6  37.0       
                     33.2  11.9       12.8
Operating result, %  -5.6  -2.1  0.4  -2.2   1.7   -2.4   2.1       
Return on capital    -5.1  -1.6  0.5  -1.7   1.6   -2.0  -2.0       
employed, %
Deliveries, 1,000 t   797   767  767   745   729  2,331  2,22   +3.9
                                                            0
Production, 1,000 t   814   763  775   708   719  2,352  2,20   +6.7
                                                            4
Capacity               90    85   87    80    83     87    85       
utilisation rate, %

The Graphics products and Speciality papers business reported an
operating loss of EUR 33.2 million (a loss of 11.9 million). The
operating result includes write-downs of EUR 31.0 million on the
fixed assets of the Reflex mill in Germany. Stripping out the write-
downs, the operating result was a loss of EUR 2.2 million (a loss of
11.9 million). Profitability was improved mainly by the growth in
delivery volumes. In addition, profitability in the previous quarter
was burdened by the costs of annual maintenance shutdowns. The
average order book at the end of September was just under three
weeks.

Deliveries by west European producers of coated fine paper rose by 3
per cent and deliveries by producers of coated magazine paper rose by
2 per cent. M-real’s delivery volume of coated fine paper rose by 6
per cent and the volume of coated magazine paper fell by 2 per cent.
The volume of speciality paper delivered by M-real rose somewhat.

The capacity utilisation rate of the paper machines was 90 per cent
(85). The order book at the end of September was slightly less than
three weeks.

The average price of coated fine paper fell slightly and the price of
coated magazine paper remained nearly at the previous quarter’s
level. The prices of speciality paper were on average down slightly
on the previous quarter’s level.

Compared with the previous year, the operating result in January-
September was weakened by the 5 per cent fall in the price of coated
fine paper and the 3 per cent fall in the price of coated magazine
paper. The average price of speciality paper also fell. The
strengthening in the euro depressed the average selling price within
all product groups. The delivery volume of coated fine paper rose by
8 per cent and that of speciality paper by 1 per cent. The delivery
volume of coated magazine paper fell by 8 per cent.

Offices

                      III    II I 04    IV   III    I-   I-   II-III
                       04    04         03    03   III  III       04
                                                    04   03
                                                              change
Turnover             167.  158. 180.  169.  151.  505. 513.    +5.4%
                        1     5    3     5     3     9    4
Operating result      0.0  -6.2  3.5   8.6   3.9  -2.7 39.6         
Operating result, %   0.0  -3.9  2.0   5.1   2.6  -0.5  7.7         
Return on capital     0.0  -3.2  2.1   4.1   2.0  -0.4  5.8         
employed, %
Deliveries, 1,000 t   246   228  254   209   207   728  682    +7.9%
Production, 1,000 t   241   243  247   203   200   731  670    -0.8%
Capacity               86    87   92    75    73    88   85         

utilisation rate, %

The operating result of the Offices business was EUR 0.0 million (a
loss of 6.2 million). Profitability was improved mainly by the growth
in delivery volumes. Second-quarter profitability was furthermore
burdened by the costs of annual maintenance shutdowns. Average
selling prices fell somewhat.

Deliveries by west European producers of uncoated fine paper
decreased by 2 per cent. The volume of products delivered by the
Offices business grew by 8 per cent. The capacity utilisation rate of
the paper machines was 86 per cent (87). The order book at the end of
September was about two weeks.

Compared with the previous year, the operating result in January-
September was weakened by the 9 per cent fall in the average selling
price. The delivery volume rose markedly.

Map Merchant Group

                      III    II I 04    IV  III     I-   I-   II-III
                       04    04         03  03     III  III       04
                                                    04   03
                                                              change
Turnover             332.  339. 354.  347.  332.  1,02 1,04    -2.0%
                        4     2    0     6     5   5.6  5.0
Operating result      0.9   3.0  3.8   0.4  -2.7   7.6  6.1         
Operating result, %   0.3   0.9  1.1   0.1  -0.8   0.7  0.6         
Return on capital     0.9   3.2  4.6   0.4  -2.3   3.0  2.5         
employed, %
Deliveries, 1,000 t   321   319  338   327   312   978  956    +2.2%

The Map Merchant paper merchanting business reported an operating
profit of EUR 0.9 million (3.0). Earnings were weakened by the rise
in delivery expenses as well as by seasonal factors.

Earnings in the January-September period were at the level of the
same period last year.

M-REAL–GROUP (all figures are unaudited)

PROFIT AND LOSS ACCOUNT  1-9/04   1-9/03  Change 1-12/03  7-9/04
(EUR million)
Turnover                4 077.5  4 569.9  -492.4 6 044.1 1 362.7
  Interest in              -4.7     -1.1    -3.6    -5.2    -1.0
  associated companies
  Other operating          63.7     50.0    13.7    73.8    23.9
  income
  Operating expenses    3 821.7  4 147.4   325.7 5 557.9 1 265.9
  Depreciation            362.0    360.3    -1.7   481.0   147.8
Operating profit          -47.2    111.1  -158.3    73.8   -28.1
% of turnover              -1.2      2.4             1.2    -2.1
  Net exchange              4.4     11.0    -6.6    20.7     0.0
  gains/losses
  Other financial         -94.6    -97.1     2.5  -174.7   -31.4
income
  and expenses
Profit before            -137.4     25.0  -162.4   -80.2   -59.5
extraordinary items
% of turnover              -3.4      0.5            -1.3    -4.4
  Extraordinary items     195.0      0.0   195.0   -15.1     0.0
Profit before taxes and    57.6     25.0    32.6   -95.3   -59.5
minority interest
% of turnover               1.4      0.5            -1.6    -4.4
  Taxes                    -7.1    -23.0    15.9    -0.7    -1.7
  Minority interest        -1.7     -1.0    -0.7     1.0    -0.9
Profit for the period      48.8      1.0    47.8   -95.0   -62.1
% of turnover               1.2      0.0            -1.6    -4.5

Taxes include taxes corresponding to profit for the period.


BALANCE SHEET                   9/2004        %    9/2003      %
(EUR million)
Assets                                                          
 Fixed assets                  4 222.6     65.5   4 806.2   67.0
 Current assets                                                 
   Inventories                   747.7     11.6     822.2   11.5
   Other current assets        1 275.6     19.8   1 381.6   19.3
   Liquid funds                  200.6      3.1     158.4    2.2
Total                          6 446.5    100.0   7 168.4  100.0
                                                                
Liabilities                                                     
 Shareholders´ equity          2 241.4     34.8   2 349.7   32.8
 Minority interest                28.3      0.4      22.3    0.3
 Provisions for liabilities       55.6      0.9      58.6    0.8
 and charges
 Long-term liabilities         1 997.3     31.0   2 904.3   40.5
 Short-term liabilities        2 123.9     32.9   1 833.5   25.6
Total                          6 446.5    100.0   7 168.4  100.0


BALANCE SHEET                  12/2003        %
(EUR million)
Assets                                         
 Fixed assets                  4 768.7     67.1
 Current assets                                
   Inventories                   802.0     11.3
   Other current assets        1 351.9     19.0
   Liquid funds                  183.6      2.6
Total                          7 106.2    100.0
                                               
Liabilities                                    
 Shareholders´ equity          2 245.3     31.6
 Minority interest                18.9      0.3
 Provisions for liabilities       77.4      1.1
 and charges
 Long-term liabilities         3 030.6     42.6
 Short-term liabilities        1 734.0     24.4
Total                          7 106.2    100.0


CASH FLOW STATEMENTS            1-9/04   1-9/03  1-12/03   7-9/04
(EUR million)
 Profit before extraordinary    -137.4     25.0    -80.2    -59.5
 items
 Depreciation                    362.0    360.3    481.0    147.8
 Taxation                        -19.1    -38.7    -19.0    -10.9
 Other changes                    14.3      8.2     35.5     11.8
Funds from operations            219.8    354.8    417.3     89.2
 Change in working capital       -64.0    -62.3      7.8    -12.2
Cash flow from operations        155.8    292.5    425.1     77.0
 Gross capital                  -159.1   -289.9   -396.7    -74.9
 expenditures 1)
 Disposal and other changes      425.9      0.0     -2.5      0.0
 in fixed assets
Cash flow after capital          422.6      2.6     25.9      2.1
expenditure
 Share issue                     340.8      0.0      0.0    340.8
 Interest-bearing net debt of    121.0     -8.5     -8.5     -6.9
 companies acquired and
 divested
 Dividend                        -53.7   -107.4   -107.4      0.0
Change in interest-bearing       830.7   -113.3    -90.0    336.0
liabilities
(+ decrease/- increase)                                          

1) Excl. interest-bearing net debt of acquired companies.
  
  
KEY FIGURES                     1-9/04   1-9/03  1-12/03  7-9/04
Earnings per share, EUR          -0.69     0.01    -0.51   -0.34
Return on capital employed, %     -0.8      2.9      1.6    -1.9
Return on equity, %               -7.2      0.1     -3.8   -10.6
Gross capital expenditures,        159      290      397      75
EUR million 1)
Personnel, average              16 726   20 562   20 372  16 843
1) Excl. interest-bearing net debt of acquired
companies.
                                                        
                                  9/04     9/03    12/03
Shareholders´ equity per         12.52    13.13    12.54
share, EUR
Equity ratio, %                   37.2     33.1     31.9
Gearing ratio, %                   100      132      137
                                                        
Securities and guarantees,        9/04     9/03    12/03
EUR million
For own loans                      218      400      287
For associated companies             1        0        1
For affiliated companies             7        5        5
For others                          11       10       15
Total                              237      415      308
                                                        
Open derivative contracts,                              
EUR million                       9/04     9/03    12/03
Interest rate derivatives       14 476   13 214   13 017
Currency derivatives             4 752    6 616    4 601
Other derivatives                    5        0        0
Total                           19 233   19 830   17 618

The fair value of open derivative contracts calculated at market
value at the end of the
review period was -11.9 EUR million (-32.2).


TURNOVER             Quarter                Quarterly
EUR Million       I-III   I-III III 04  II 04   I 04  IV 03 III 03
                   2004    2003
Cartons           651.8   612.8  237.6  210.1  204.1  196.2  200.3
Graphics         1761.7  1775.4  589.5  581.1  591.1  572.6  578.7
products
and Speciality
papers
Offices           505.9   513.4  167.1  158.5  180.3  169.5  151.3
Map Merchant     1025.6  1045.0  332.4  339.2  354.0  347.6  332.5
Group
Internal sales    132.4   623.3   36.1   44.4   52.0  188.3  204.4
and
other operations
GROUP TOTAL      4077.5  4569.9 1362.7 1333.3 1381.5 1474.2 1467.2

TURNOVER                    
EUR Million       II 03    I 03  IV 02
Cartons           196.9   215.6  212.5
Graphics          574.6   622.1  586.6
products
and Speciality
papers
Offices           170.5   191.6  200.8
Map Merchant      345.0   367.5  375.0
Group
Internal sales    220.8   198.1  212.4
and
other operations
GROUP TOTAL      1507.8  1594.9 1587.3

OPERATING PROFIT     Quarter                Quarterly
AND RESULT
EUR Million       I-III   I-III III 04  II 04   I 04  IV 03 III 03
                   2004    2003
Cartons            34.5    35.7   10.7    9.8   14.0   -2.3   15.1
Graphics          -42.6    37.0  -33.2  -11.9    2.5  -12.8   10.0
products
and Speciality
papers
Offices            -2.7    39.6    0.0   -6.2    3.5    8.6    3.9
Map Merchant        7.6     6.1    0.9    3.0    3.8    0.4   -2.7
Group
Other operations  -44.0    -7.3   -6.5  -14.5  -23.0  -31.2    2.6
OPERATING PROFIT  -47.2   111.1  -28.1  -19.9    0.8  -37.3   28.9
% of turnover      -1.2     2.4   -2.1   -1.5    0.1   -2.5    2.0
Net exchange        4.4    11.0    0.0   -0.8    5.2    9.7   -0.5
gains/
losses
Other financial   -94.6   -97.1  -31.4  -28.9  -34.3  -77.6  -32.3
income
and expenses
PROFIT BEFORE    -137.4    25.0  -59.5  -49.6  -28.3 -105.2   -3.9
EXTRAORDINARY
ITEMS
% of turnover      -3.4     0.5   -4.4   -3.7   -2.1   -7.1   -0.3

OPERATING PROFIT            
AND RESULT
EUR Million       II 03    I 03  IV 02
Cartons             2.5    18.1    6.7
Graphics           -2.1    29.1   25.7
products
and Speciality
papers
Offices            13.9    21.8   19.6
Map Merchant        3.4     5.4   -9.3
Group
Other operations   -2.9    -7.0    8.0
OPERATING PROFIT   14.8    67.4   50.7
% of turnover       1.0     4.2    3.2
Net exchange        5.3     6.2    5.0
gains/
losses
Other financial   -29.8   -35.0  -45.6
income
and expenses
PROFIT BEFORE      -9.7    38.6   10.1
EXTRAORDINARY
ITEMS
% of turnover      -0.6     2.4    0.6

OPERATING            Quarter                 Quarterly
PROFIT, %
                  I-III   I-III III 04   II 04   I 04  IV 03 III 03
                   2004    2003
Cartons             5.3     5.8    4.5     4.7    6.9   -1.2    7.5
Graphics           -2.4     2.1   -5.6    -2.1    0.4   -2.2    1.7
products
and Speciality
papers
Offices            -0.5     7.7    0.0    -3.9    2.0    5.1    2.6
Map Merchant        0.7     0.6    0.3     0.9    1.1    0.1   -0.8
Group
GROUP TOTAL        -1.2     2.4   -2.1    -1.5    0.1   -2.5    2.0

OPERATING        
PROFIT, %
                  II 03    I 03  IV 02
Cartons             1.2     8.4    3.2
Graphics           -0.4     4.7    4.4
products
and Speciality
papers
Offices             8.2    11.4    9.8
Map Merchant        1.0     1.5   -2.5
Group
GROUP TOTAL         1.0     4.2    3.2


RETURN ON CAPITAL        Quarter   Quarter       Year
EMPLOYED, %
                      I-III 2004     I-III       2003
                                      2003
Cartons                      5.7       5.5        3.9
Graphics products and       -2.0       2.0        1.0
Speciality papers
Offices                     -0.4       5.8        5.4
Map Merchant Group           3.0       2.5        2.0
GROUP TOTAL                 -0.8       2.9        1.6
                                                     
CAPITAL EMPLOYED,        30.9.04   30.9.03   31.12.03
EUR Million
Cartons,                   897.6     908.5      882.1
Graphics products and    2 662.5   2 852.9    2 849.7
Speciality papers
Offices                    902.4     860.0      839.0
Map Merchant Group         397.5     381.9      383.2
Other assets               -32.2     792.3      734.4
GROUP TOTAL              4 827.8   5 795.6    5 688.4

PERSONNEL,               Quarter   Quarter       Year
average               I-III 2004     I-III       2003
                                      2003
Cartons                    2 888     3 024      2 970
Graphics products and      6 713     7 039      6 957
Speciality papers
Offices                    2 048     2 123      2 107
Map Merchant Group         2 524     2 566      2 554
Other operations           2 553     5 810      5 784
GROUP TOTAL               16 726    20 562     20 372


DELIVERIES           Quarter                Quarterly
1000 tons          I-III I-III   III 04  II 04  I 04  IV 03 III 03
                    2004  2003
Cartons 1)           850   757     310    275   265    250   246
Graphics products   2331  2220     797    767   767    745   729
and Speciality
papers
Offices              728   682     246    228   254    209   207
Paper businesses    3059  2902    1043    995  1021    955   937
total
Map Merchant         978   956     321    319   338    327   312
Group

DELIVERIES                  
1000 tons          II 03   I 03  IV 02
Cartons 1)           246    265    270
Graphics products    727    763    717
and Speciality
papers
Offices              229    246    211
Paper businesses     956   1009    928
total
Map Merchant         317    328    317
Group

PRODUCTION           Quarter                Quarterly
1000 tons          I-III I-III   III 04  II 04  I 04  IV 03 III 03
                    2004  2003
Cartons              817   696     322    242   253    217   238
paperboard mills
1)
Graphics products   2352  2204     814    763   775    708   719
and Speciality
papers
Offices              731   670     241    243   247    203   200
Paper mills total   3083  2873    1055   1006  1022    912   919
Metsä-Botnia´s       869   854     290    279   300    270   305
pulp 2)
M-real´s pulp       1134  1071     384    369   381    368   350

PRODUCTION                  
1000 tons         II 03   I 03  IV 02
Cartons             208    250    247
paperboard mills
1)
Graphics products   718    767    713
and Speciality
papers
Offices             233    237    207
Paper mills total   950   1004    921
Metsä-Botnia´s      269    280    249
pulp 2)
M-real´s pulp       355    366    358

1)  Equals to M-real´s ownership (47 % in Kemiart Liners until QII
2004 and 100% in QIII 2004).
2)  Equals to M-real´s ownership (47 % in Metsä-Botnia).

OPERATING RATES,     Quarter                Quarterly
%
                   I-III I-III   III 04  II 04  I 04  IV 03 III 03
                    2004  2003
Cartons               90    86      96     86    89     79    87
paperboard mills
Graphics products     87    85      90     85    87     80    83
and Speciality
papers
Offices               88    85      86     87    92     75    73
Paper mills total     88    85      89     86    88     79    80

OPERATING RATES,            
%
                   II 03   I 03  IV 02
Cartons               78     94     93
paperboard mills
Graphics products     83     89     82
and Speciality
papers
Offices               89     93     79
Paper mills total     84     90     82



M-REAL CORPORATION


Hannu Anttila
Senior Executive Vice President and COO




About Us

Metsä Boardwww.metsaboard.com Metsä Board is a leading European producer of premium fresh fibre paperboards including folding boxboards, food service boards and white kraftliners. Our lightweight paperboards are developed to provide better, safer and more sustainable solutions for consumer goods as well as retail-ready and food service applications. We work together with our customers on a global scale to innovate solutions for better consumer experiences with less environmental impact. The pure fresh fibres Metsä Board uses are a renewable resource, traceable to origin in sustainably managed northern forests. The global sales network of Metsä Board supports customers worldwide, including brand owners, retailers, converters and merchants. In 2016, the company’s sales totalled EUR 1.7 billion, and it has approximately 2,500 employees. Metsä Board, part of Metsä Group, is listed on the Nasdaq Helsinki.

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