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Oy Metsä-Botnia Ab / Interim Report 1-3/2001

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* Turnover EUR 340.1 million (EUR 335.7 million January-March 2000)
    * Operating profit EUR 125 million (EUR 108.1 million)
    * Profit before extraordinary items EUR 123.8 million (EUR 98.5 million)
    * Investments EUR 26.4 million (EUR 12.2 million)
    * ROCE 37.4 % (32.4 %)
    * Equity ratio 65.4 % (52.1 %) 

Turnover and operating profit

Profitability was better than for the first quarter last year but weaker than
in the final quarter of 2000. Profit before extraordinary items was EUR 123.8
million, 26 per cent higher than last year's corresponding figure of EUR 98.5
million. Turnover was EUR 340.1 million (335.7 million) and operating profit
EUR 125 million (EUR 108.1 million). 

Return on capital employed for the first quarter was 37.4 per cent (32.4 per
cent) and net gearing 34 per cent (59.8 %). The equity ratio at the end of
March was 65.4 per cent (67.1% at 31 December 2000). A total of EUR 176 million
was distributed as dividend in March. 

Market review

Demand for market pulp has been weak throughout the first quarter. Norscan
stocks rose to two million tonnes in February but then fell by 96,000 tonnes in
March to 1.9 million tonnes. Pulp producers have taken more downtime, and in
March the rate of capacity utilization fell from 86 to 81 per cent. 

Softwood pulp prices began the year at USD 710/tonne but had fallen to USD 620
by the end of March. Short-fibre pulp prices fell correspondingly from EUR 795
to EUR 640. 

More downtime is expected in the next few months to help control the balance
between supply and demand. A gradual recovery in demand is expected as
customers' stocks are low. 

Orderstocks for linerboard were lower than last year but average prices have
remained the same as at the end of 2000. Prices during the first quarter were
15 per cent higher than for this period a year ago. 

Deliveries

Pulp deliveries were 481 208 tonnes, 21 per cent lower than for this period
last year. Production during the first quarter was reduced by 86,000 tonnes to
correspond with demand. More downtime is scheduled for Kaskinen, Rauma and
Pori. The Joutseno mill will also stop production in April because of start-up
of the new fibre line. 

Board deliveries were roughly 74,781 tonnes, 6 per cent down on the first
quarter last year. Invoicing for uncoated products was also somewhat down on
last year due to intense competition. Sales of coated products were up 14 per
cent on this period a year ago. Linerboard production has been curtailed since
the start of the year in response to smaller demand. 

Investments

The new fibre line at Joutseno pulp (EUR 250 million) mill will start
production in mid-May. The line will raise the mill's capacity by 200,000 t/a,
necessitating roughly one million cubic metres more wood. The increase in
production will go entirely to Metsä-Botnia's owners for paper manufacture. 

Outlook

Pulp prices in Asia are now thought to have bottomed out. Probably the only way
pulp supply can be kept in line with demand over the next few months is through
major cut-backs in production. New capacity due on stream this year is largely
for short-fibre pulp. 

Competition over prices for uncoated linerboards is likely to remain fairly
strong, particularly on markets outside Europe. 

Additional information:
Juha Pesonen, tel. +358 1046 94675





                                            

                

            

        

    

    



    

        
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