Metsäliitto Group's interim report 1-9/2008


                        
Metsäliitto Group's interim report January-September 2008, 22
October 2008

Metsäliitto Group's operating result excluding non-recurring items
was EUR 120 million in January-September

Result for January-September
- Sales EUR 4,981 million (EUR 5,167 million).
- The operating result, excluding non-recurring items, was EUR 120
million (259). Operating result, including non-recurring items, was
EUR 208 million (198).
- Result before tax and excluding non-recurring items was EUR -43
million (105). The result from continuing operations, including
changes in deferred tax liability, was EUR 39 million (-15).

Result for July-September
- Sales EUR 1,595 million (EUR 1,698 million).
- The operating result, excluding non-recurring items, was EUR 27
million (87). Operating result, including non-recurring items, was
EUR 19 million (93).
- Result before tax and excluding non-recurring items was EUR -28
million (33). The result from continuing operations, including
changes in deferred tax liability, was EUR -33 million (22).
Events in the third quarter
- M-real announced the sale of its Graphic Papers Business Area to
the South African company Sappi Limited for an enterprise value of
EUR 750 million. The sale is expected to be completed latest during
the first quarter of 2009. The sale includes several long-term supply
agreements (maximum of 12 years), which in total correspond to about
EUR 3.5 billion in sales during the term of agreements.


'"The planned transaction of M-real's Graphic Papers Business Area
will significantly improve the future prospects of our Board and
Paper Industry. It will also reinforce the operating environment of
the entire industry. We will actively continue the strategic review
of our remaining paper businesses. The tightened market situation and
the increased production costs are causing pressure for further
production adjustment measures in almost all of our business areas."

Kari Jordan, President & CEO, Metsäliitto Group


Metsäliitto Group

Income statement                     2008   2007   2008   2007   2007
(Continuing operations)               1-9    1-9     Q3     Q3   1-12
Sales                               4 981  5 167  1 595  1 698  6 797
  Other operating income              215     66     43     28     92
  Operating expenses               -4 702 -4 736 -1 525 -1 544 -6 256
  Depreciation and impairment        -286   -299    -94    -89   -589
losses
Operating profit                      208    198     19     93     44
  Share of results in associates       11      5      7      2     12
  Net exchange gains / losses           1     -3      1      1      5
  Other financial income &           -176   -156    -63    -57   -221
expenses
Result before tax                      44     44    -36     38   -160
  Income tax                           -5    -59      3    -16    -24
Result from continuing operations      39    -15    -33     22   -184

Metsäliitto Group

Profitability                            2008  2007  2008  2007  2007
(Continuing operations)                   1-9   1-9    Q3    Q3  1-12
Operating profit, EUR mill.               208   198    19    93    44
   - " -, excluding non-recurring items   120   259    27    87   301
Return on capital employed, %             6.3   5.6   2.8   7.4   1.4
   - " -, excluding non-recurring items   4.0   7.2   3.4   7.0   6.4
Return on equity, %                       2.3  -0.8  -6.1   3.6  -7.5
  - " -, excluding non-recurring items   -3.0   2.4  -4.7   2.7   2.7

Financial position                       2008  2007  2008  2007  2007
                                         30.9  30.9  30.6  30.6 31.12
Equity ratio, %                          27.5  29.2  30.1  29.0  28.8
Gearing ratio, %                          174   156   157   160   163
Net gearing ratio, %                      162   147   147   149   142
Interest-bearing net liabilities, EUR   3 373 3 633 3 421 3 647 3 271
mill.


Business areas

Sales and Operating profit        Wood              Board     Tissue
1-9/2008                   Wood   Products Pulp *)  and Paper and
(EUR mill.)                Supply Industry Industry Industry  Cooking
                                                              Papers
Sales                       1 372      923    1 232     2 514     695
 Other operating income        12        5       22       172      18
 Operating expenses        -1 354     -915     -930    -2 414    -638
 Depreciation & impairment     -4      -32     -103      -172     -42
losses
Operating profit               26      -19      221       100      33

*) Represents 100%. The Metsäliitto Group consolidates 53% of the
Pulp Industry.

The Graphic Papers business units, which are to be transferred to
Sappi under the deal announced at the end of September, are reported
in discontinued operations.


The figures are unaudited
METSÄLIITTO GROUP

INTERIM REPORT 1 January-30 September
2008

Sales and result
Metsäliitto Group's sales for January-September were EUR 4,981
million (5,167). Comparable sales were down approximately three per
cent. Sales have increased by the pulp mill in Uruguay, which has had
an excellent start. However, sales have decreased by the closing down
of the M-real's Sittingbourne and Wifsta paper mills, and the
divestment of the folding carton business.

Due to the planned divestment of the Graphic Papers Business Area,
the figures for the comparison years have also been adjusted in
accordance with IFRS regulations. As a result of the divestment,
Metsäliitto Group's sales in 2007 decreased by EUR 872 million, and
in 2006 by EUR 858 million.

The operating result, excluding non-recurring items, was EUR 120
million (259). The net amount of non-recurring items was EUR 88
million (-61).

The net amount of non-recurring items in the third quarter was EUR -8
million. The most significant item was the EUR 13 million cost
provision relating to the guarantee to the mill's energy supplier on
behalf of the Pont Sainte Maxence (PSM) mill, sold in June 2006, and
the write-down of receivables from PSM. The net amount of other
non-recurring items totalled EUR 5 million in July-September.

In the second quarter, M-real sold a total of 100,000 Pohjolan Voima
Oy B2 shares to Kymppivoima Oy for EUR 80 million, for which a sales
gain and fair value of EUR 74 million was realised. Another
significant non-recurring income was booked during the first quarter.
This, together with the sale of mill operations in the UK and pension
liability arrangements, generated a profit of EUR 24 million in
total. Furthermore, different cost provisions were booked in
January-September, totalling approximately EUR 2 million.

The operating result including non-recurring items was EUR 208
million (198). The Group's net financial expenses were 3.5 per cent
of sales (3.0). Financial income was EUR 17 million (13), shares in
associate companies were EUR 11 million (5) and financial expenses
were EUR 193 million (169). Net exchange gains/losses recognised in
financial items were EUR 1 million (-3). At the end of September, the
exchange rate of the US dollar against the euro was 3 per cent
stronger and that of the British pound 8 per cent weaker than at the
beginning of the year. On average, the US dollar weakened by 13 per
cent in January-September, and the British pound by 16 per cent
compared to the same period last year.

The result before tax was EUR 44 million (44) and taxes, including
changes in deferred tax liability, were EUR 5 million (59). The
result for continuing operations was EUR 39 million (-15), the result
for discontinued operations was EUR -276 million (-22) and the result
for the financial period was EUR -237 million (-37).

The result for discontinued operations includes the result for mills
classified as assets held for sale and the EUR 25 million sales gain
reduction from the sale of the Map Merchant Group in 2007.

EUR 206 million as an impairment loss and other non-recurring items
relating to the planned sale of the Graphic Papers Business Area was
also recognised in the result for discontinued operations.

The result for January-September attributable to the owners of the
parent company was EUR -73 million (50), and to the minority EUR -164
million (-87).

The Group's return on capital employed for continuing operations was
6.3 per cent  (5.6), and the return on equity was 2.3 per cent
(-0.8). Excluding non-recurring items, the return on capital employed
was 4.0 per cent  (7.2) and the return on equity was -3.0 per cent
(2.4).

Balance sheet and financing
Metsäliitto Group's overall liquidity at the end of September was EUR
1.4 billion (31 December 2007: 1.6). Of this, EUR 0.2 billion (0.4)
was in terms of liquid assets and investments, and EUR 1.2 billion
(1.2) was in binding credit facility agreements not included in the
balance sheet. In addition, the Group can satisfy short-term
financial needs with non-binding commercial paper schemes in Finland
and abroad, as well as credit lines amounting to approximately EUR
0.5 billion.

The Group's equity ratio was 27.5 per cent in September and net
gearing was 162 per cent (31 December 2007: 28.8% and 142%,
respectively). Interest-bearing net liabilities stood at EUR 3,373
million (31 December 2007: 3,271). The planned sale of the Graphic
Papers is expected to improve the equity ratio by at least 3 per cent
units and the net gearing by over 25 per cent units. The equity ratio
of the parent company, Metsäliitto Cooperative, was 56.0 per cent at
the end of September and the net gearing ratio was 47 per cent (31
December 2007: 55.0% and 37% respectively).

Metsäliitto Cooperative's members' capital decreased by EUR 4.5
million in January-September. The actual members' capital grew by EUR
4.2 million, the additional members' capital A decreased by EUR 6.5
million, and the additional members' capital B decreased by EUR 2.2
million. At the end of September, Metsäliitto Cooperative had 129,978
members (31 December 2007: 131,032).

In September, Metsä Tissue signed a syndicated credit limit agreement
of EUR 238 million to refinance the current syndicated loan falling
due in June 2009. A total of eight banks were party to the agreement.

On 2 September 2008, Forest Oriental S.A., Metsä-Botnia's subsidiary
in Uruguay which specialises in eucalyptus cultivation, received the
approval of the Central Bank of Uruguay regarding registration of its
program to issue a Corporate Bond for a nominal value of USD 100
million. The arranger issued the first series under the program with
a nominal value of USD 35 million on 18 September 2008. The term of
repayment of the first series is 10 years. Through the program, the
company is seeking to achieve a more efficient capital structure and
take part in the development of local Uruguayan long-term investment
instruments.

Personnel
The Group employed an average of 17,759 people (19,542) in
January-September. At the end of September, the number of personnel
in the Group was 17,205 (31 December 2007: 17,838). The parent
company, Metsäliitto Cooperative, employed 3,272 people at the end of
September (31 December 2007: 3,165).

Martin Lillandt, Senior Executive Vice President of Metsäliitto
Cooperative will retire on 30 November 2008. Ole Salvén, Group
Executive Vice President, Woods Products Industry, has been appointed
Deputy to the CEO of Metsäliitto Cooperative as of 1 December 2008.
Juha Mäntylä, Forest Director of Metsäliitto Group, has been
appointed Group Executive Vice President, Metsäliitto Wood Supply,
also from 1 December 2008.

Metsä-Botnia's President and CEO, Erkki Varis, retired on 31 August
2008. His successor, Ilkka Hämälä, assumed the position of President
and CEO on 1 September 2008.

Discontinued operations
The planned sale of the Graphic Papers Business Area was announced in
September. In accordance with IFRS regulations, the results for mills
included in the transaction have been entered in the line "Result
from discontinued operations" in the income statement. The income
statements of comparison years have been adjusted accordingly.

Investments, acquisitions and divestments
Metsäliitto Group's capital expenditure and corporate acquisitions
totalled EUR 190 million (318).

Restructuring process continues
On 29 September, M-real announced the sale of its Graphic Papers
Business Area to the South African company Sappi Limited. The sale
comprises the Kirkniemi and Kangas mills in Finland, the Stockstadt
mill in Germany and the Biberist mill in Switzerland, whose total
capacity is approximately 1.9 million tons.

Of the Graphic Papers Business Area's units, the paper mills in
Hallein, Gohrsmühle, Reflex and Äänekoski, as well as Husum paper
mill's paper machine 8, will remain in M-real's ownership. After the
closing of the transaction, the Äänekoski paper mill and Husum mill's
PM8 will continue production for Sappi under a long-term contract. As
part of the transaction, M-real and Sappi have also entered into a
long-term agreement on the supply of pulp and BCTMP and other smaller
services and supplies. In addition, Metsäliitto and Sappi have also
signed a long-term wood supply agreement.

In connection with the sale, M-real is planning to discontinue the
production of standard coated fine paper in the Hallein and
Gohrsmühle mills. The company's intention is to develop Gohrsmühle
and Reflex mills together as the specialty paper unit and to extend
uncoated fine paper production in Gohrsmühle. M-real is continuing to
investigate various options for the development of the Hallein mill
with selected partners.

The transaction consideration of EUR 750 million consists of EUR 500
million in cash and assumed debt, a EUR 200 million vendor loan note
from Sappi to M-real and EUR 50 million of newly issued shares in
Sappi. M-real expects the transaction to reduce its annual sales by
approximately EUR 1 billion and its net liabilities by approximately
EUR 630 million.

The sale is subject to the approvals of Sappi's extraordinary
shareholders' meeting and the competition authorities, as well as the
implementation of Sappi's planned rights offering. The sale is
expected to be completed latest during the first quarter of 2009.

In this interim report, the units included in the sale have been
classified as assets held for sale, and EUR 206 million has been
booked as an impairment loss and other non-recurring items relating
to the sale.

Business areas

Wood Supply
Wood Supply sales were EUR 1,372 million (1,243) in
January-September, and the operating result came to EUR 26 million
(28). The operating result includes approximately EUR 1 million (2)
in non-recurring income. Wood Supply Finland accounted for EUR 936
million (864) of the sales and EUR 21 million (21) of the operating
result.

Wood sale volumes in the entire industry are clearly below the level
of recent years. The purchase volume of the forest industry from
private forests was approximately 29 million cubic metres, which is
about 14 million cubic metres less than in 2007.

The autumn season in domestic wood sales was boosted by the Finnish
Government decision on tax exemption for wood from first thinning
stands. Wood sales reached a weekly record in the last week of August
with over 2.5 million cubic metres sold. While the government
announced a fixed-term tax exemption for a share of the income from
wood sales, the September wood sale volumes nevertheless dropped to a
level some 25 per cent below the volumes in the corresponding period
of the previous years.

Metsäliitto is actively pursuing measures to find solutions for the
challenging wood sale situation. The national Summer Logging Campaign
started by Metsäliitto in the spring with the objective of increasing
the amount of thinning has progressed well. The area marked forthinning was already increased by one-third in 2007 compared with
previous years. Metsäliitto and its partners in the national Campaign
for Exploiting Peatland Logging Reserves have identified technical
solutions and operating models for increasing around-the-year logging
in commercial peatland.

The wood supply organisation is undergoing a reform. The reform of
the Finnish wood supply organisation, announced in August, enhances
the services available to owner-members, simplifies operation control
and improves reporting. Changes will also be made in the wood supply
organisation in Russia due to Russian export taxes on wood, which
will probably be implemented at the turn of the year. In
January-September, Metsäliitto's imports from Russia to Finland
amounted to 1.7 million cubic metres (1.4).

In the Baltic countries, wood supply from private forests remained
low, and poor weather conditions impeded harvesting. In Sweden, the
wood supply market has continued to be brisk. While log prices have
shown a declining trend, pulpwood prices have remained stable. In
Central Europe, supply has remained at a high level.

Sufficient quantities of wood as required by the curtailed production
volumes were supplied to the mills throughout the wood supply
operating area. Deliveries to the mills totalled EUR 26.5 million
(27.5) cubic metres in January-September.

Wood Products Industry
Metsäliitto Wood Products Industry's sales were EUR 923 million
(1,078) in January-September, and the operating result came to EUR
-19 million (88). The difficult situation in the Solid Wood business
line, which is due to the disproportionate relationship between the
low market price of sawn timber and high wood raw material prices, is
the main reason for the negative result. While other business lines
where the proportion of upgrading and services is larger achieved a
profit, their profitability has also deteriorated due to the market
situation.

The market situation has led to the production of sawn timber being
curtailed by 20 per cent at all mills during the year. Statutory
labour negotiations concerning the potential closure of the Teuva
sawmill and improving the efficiency of upgrading operations at the
Kaskinen mill will begin on 27 October. The number of personnel
affected is 102. The statutory labour negotiations concerning plans
to close the Soinlahti sawmill will be concluded today, 22 October.
The number of personnel affected is 69. Plywood, Kerto and glulam
production has also been curtailed since September.

The economic downturn has also affected the construction market. This
is seen in the lower amount of new residential construction as well
as in the renovation of buildings. The transportation industry's
prospects have also weakened.

The objective of Metsäliitto Wood Products Industry's business
strategy is to increase added value and to decrease the proportion of
standard products. During the first three quarters of the year, Wood
Products Industry acquired iLevel's European engineering wood
operations, constructed a new birch plywood upgrading mill in
Suolahti and started the modernisation of the Boston unit's upgrading
line in the UK.

Pulp
During January-September, Metsä-Botnia's sales increased by
approximately 20 per cent compared with the corresponding period last
year, amounting to EUR 1,232 million (1,028). The operating result
was EUR 221 million (160).

The sales and operating result improved particularly due to the
excellent performance of the Uruguay mill, which started up in
November 2007. The impact of the IFRS valuation of Uruguayan forests
was approximately EUR 17 million. The profitability of the Finnish
mills was only satisfactory due to higher wood raw material costs and
the unsteady availability of raw material.

Frequent paper mill shutdowns during the summer in North America and
Europe reduced the demand for pulp. In the third quarter, Chinese
paper manufacturers also began to consume their existing pulp stocks
and decreased their purchase volumes. As pulp mill utilisation rates
were high during the third quarter, compared to the previous quarter,
although demand was poor, the producers` pulp stocks increased
markedly and pulp prices took a downward turn. In June, softwood pulp
was selling at USD 900/tonne and hardwood pulp at USD 840/tonne. The
comparable prices at the end of September were USD 850 and USD 800.

Foreign-currency-denominated market prices for softwood pulp were, on
average, 13 per cent higher in January-September compared with the
corresponding period last year. The average prices of hardwood pulp
increased by 19 per cent. Conversely, the US dollar dropped
approximately 13 per cent, so euro-denominated prices increased only
slightly.

The Fray Bentos mill in Uruguay is performing steadily to the
standards required as concerns production, product quality and the
environment. The International Finance Corporation (IFC), a member of
the World Bank Group, released the first environmental monitoring
report for the mill since it began operating in November 2007. The
report finds that the mill is performing to the air and water quality
standards projected in the Cumulative Impact Study (CIS) and
Environmental Impact Assessment (EIA) published by IFC before mill
start-up. Emissions and effluents also remain clearly below the
permit limits defined by the Uruguayan environmental authorities.

The external operating system of the Fray Bentos mill was audited in
September by Inspecta. The audit results confirmed that the mill
complies with international quality, environmental, occupational
health and safety and product safety standards. The mill will be
brought under Metsä-Botnia's joint ISO certificate at a later date.

M-real's result includes 30 per cent of pulp production's operating
profit. In total, 53 per cent of the figures for the Pulp Industry
are consolidated into Metsäliitto Group's financial statements.

Board and Paper
Board and Paper Industry's sales totalled EUR 2,514 million (2,671),
and the operating result excluding non-recurring items was EUR 16
million (66).

Increased wood raw material and energy costs, the stronger euro
against the US dollar and British pound, and the production
curtailments at Metsä-Botnia's mills in Finland depressed the
operating result excluding non-recurring items compared with last
year. The result was improved by the cost savings measures and price
increases that were implemented, and the launch of the pulp mill in
Uruguay in November 2007.

Non-recurring items totalled EUR 84 million net (73) in
January-September.

The non-recurring items recognised in the operating result in
July-September totalled EUR -11 million. They consisted of a EUR 13
million cost provision concerning the guarantee to the mill's energy
supplier on behalf of the Pont Sainte Maxence (PSM) mill, sold in
June 2006, the write-down of corresponding receivables from PSM and a
EUR 2 million gain on the sale of land of mills sold at an earlier
date.

During the second quarter, the EUR 74 million gain on the sale of
Pohjolan Voima shares was booked as income, and a EUR 2 million cost
provision dealing with the sales network efficiency enhancement
programme was booked as an expense. During the first quarter, EUR 24
million was booked as income connected to the release of pension
liabilities in the UK as a result of the divestment of the New Thames
mill, and from certain other liabilities related to the shut-down of
the Sittingbourne mill. Different cost provisions totalling EUR 1
million were booked as expenses.

The operating result including non-recurring items was EUR 100
million (139). Net interest and other financial expenses totalled EUR
108 million (100), income from associates was EUR -1 million (0) and
net exchange gains/losses recognised as financial items were EUR 2
million (-3).

The result before tax from continuing operations was EUR -7 million
(36), earnings per share were EUR -0.05 (0.06) and return on capital
employed was 4.9 per cent (6.1). Excluding non-recurring items, the
result before taxes was EUR -91 million      (-37), earnings per
share were EUR -0.31 (-0.19) and the return on capital employed was
1.3 per cent (3.2).

At the end of September, M-real's equity ratio was 32.5 per cent and
net gearing was 114 per cent (31 December 2007: 34.4% and 99%). In
some of M-real's borrowing arrangements, a limit of 120 per cent has
been set for net gearing and a limit of 30 per cent for the equity
ratio. At the end of September, net gearing calculated in the manner
defined in the borrowing agreements was approximately 96 per cent,
and the equity ratio approximately 38 per cent.

Tissue and Cooking Papers
In January-September, sales of Metsä Tissue, which produces tissue
and cooking papers, stood at EUR 696 million (632), and its operating
result was EUR 33 million (22). The steady development in
Metsä-Tissue's own brands and private label products contributed to
the improvement in the result.

The operating result includes approximately EUR 5 million in
non-recurring expenses and approximately EUR 4 million in
non-recurring income.

Sales were up approximately 10 per cent from last year. Growth was
promoted by an increase in production volumes (4%), the increase in
selling prices and the changes in sales structure (6%).

Clean and Shine cleaning paper was launched under the Serla brand. In
the large-scale consumer business, the Saga brand was integrated into
the Katrin brand. The products were also grouped into three different
quality grades at the same time. The Mola brand design was also
modernised.

A second upgrading line was installed at the Naro Fominski
distribution and upgrading unit in Russia. The line manufactures
products under the Lambi, Mola and Katrin brands. Roller towel
production for large-scale customers began in Krapkowice, Poland.

The construction of new warehouse space in Zilina, Slovakia, and
Düren, Germany, is progressing according to schedule. The Bork
warehouse in Germany has been sold.

In Sweden, the company launched a 12-month maintenance project in
September with the purpose of documenting the best maintenance
practices and sharing them throughout all Metsä Tissue units.

Risks and uncertainties
Since the estimates and statements in this interim report are based
on current plans and projections, they involve risks and
uncertainties that may cause actual results to materially differ from
those expressed in such statements. The risks related to the Group's
business have been explained more extensively in Metsäliitto Group's
annual report for 2007.

Consumer and investment demand are declining because of the financial
crisis, and global economic uncertainty could have a negative impact
on the market outlook in the long term.

Outlook
Demand for all timber types continues to be good in Finland, and
Metsäliitto is in an good position to respond to the desired and
permanent upturn in the wood trade. Stands marked for felling before
the winter, roundwood and forest energy are in particular demand.
Although weather conditions in Finland will have an impact on the
supply of wood to the Group's mills, it is probable that sufficient
quantities can be supplied by means of special arrangements.

In order to improve the weakened profitability of the Solid Wood
business line, Metsäliitto Wood Products Industry will have to
initiate further production adjustment measures. The remaining
business lines continue to be profitable despite the difficult market
situation. Solid Wood will achieve a negative result for the full
year, and the profitable operations of other business lines will not
be enough to make the overall result profitable.

As pulp prices are expected to show a slightly declining trend,
achieving profitable performance will be a challenge for
Metsä-Botnia. The fourth-quarter result is nevertheless expected to
be at a good level. The sharp growth in production costs will erode
the profitability of the Finnish mills, and there will be further
production curtailments in Finland.

The demand for M-real's principal products in Europe seems to be
continuing at a relatively stable level in the fourth quarter, and
measures aimed at increasing product prices will be continued in all
business areas. Production costs will remain high, and M-real will
not be able to fully offset cost inflation through its own
cost-efficiency measures this year.

M-real's fourth-quarter operating result excluding non-recurring
items is expected to show a seasonal weakening on the third quarter.
The overall operating result for 2008 excluding non-recurring items
will remain weaker than the year before. This is attributable to
higher production expenses, restrictions in pulp production due to
the wood raw material situation and the fact that price increases for
coated fine paper have been delayed.

The weakening growth prospects in Europe are not expected to have any
significant influence on the sales volumes of tissue and cooking
paper. There is continuing pressure to transfer the higher expenses,
regarding energy and transportation in particular, to sales prices.

Metsäliitto Group's third-quarter result excluding non-recurring
items was in line with expectations. Due to seasonal factors and the
difficult market situation of the Wood Products Industry in
particular, the fourth-quarter operating profit before non-recurring
items is likely to remain below the previous quarter's level.
Metsäliitto Group's operating result for 2008, excluding
non-recurring items will remain clearly below last year's level.


Espoo, 22 October 2008

Metsäliitto Group
Board of Directors


For further information:
Ilkka Pitkänen, Group CFO, Metsäliitto Group, tel. +358 10 465 4260
Anne-Mari Achrén, Group CCO, Metsäliitto Group, tel. +358 10 465 4541

Unaudited

METSÄLIITTO GROUP

Income statement              2008   2007          2008   2007   2007
(EUR mill.)                    1-9    1-9 Change     Q3     Q3   1-12
Sales                        4 981  5 167   -186  1 595  1 698  6 797
 Other operating income        215     66    149     43     28     92
 Materials and services     -3 362 -3 354     -8 -1 082 -1 139 -4 453
 Employee costs               -668   -730     62   -212   -226   -974
 Other operating expenses     -672   -652    -20   -231   -179   -829
 Depreciation and             -286   -299     13    -94    -89   -589
impairment losses
Operating profit               208    198     10     19     93     44
 Share of results in            11      5      6      7      2     12
associates
 Net exchange gains /            1     -3      4      1      1      5
losses
 Other financial income         17     13      4      7     -1     17
 Other financial expenses     -193   -169    -24    -70    -57   -238
Result before tax               44     44      0    -36     38   -160
 Income taxes                   -5    -59     54      3    -16    -24
Result from continuing          39    -15     54    -33     22   -184
operations


Result from discontinued      -276    -22   -254   -212     -5    -27
operations
Net result for the period     -237    -37   -200   -245     17   -211

Attributable to:
Owners of parent company       -73     50   -123    -92     21     -9
Minority interest             -164    -87    -77   -153     -4   -202
                              -237    -37   -200   -245     17   -211



Unaudited

Balance sheet                              2008  2007   2007
                                          30.9. 30.9. 31.12.
ASSETS
Non-current assets
 Intangible assets                          320   596    389
 Tangible assets                          3 047 4 104  4 021
 Biological assets                           95    80     83
 Shares in associated and other companies   587   461    506
 Interest-bearing receivables                14    39     32
 Deferred tax receivables                    53    77     46
 Other non-interest-bearing receivables       9     3     12
                                          4 125 5 360  5 090
Current assets
 Inventories                              1 020 1 247  1 132
 Interest-bearing receivables                11     7     27
 Non-interest-bearing receivables         1 166 1 661  1 358
 Cash and cash equivalents                  218   164    428
                                          2 415 3 079  2 945

Assets classified as held for sale        1 065    33

TOTAL                                     7 605 8 472  8 035

MEMBERS' FUNDS AND LIABILITIES
Members' funds                            1 248 1 397  1 328
Minority interest                           837 1 074    978
Total members' funds                      2 085 2 471  2 306

Non-current liabilities
 Deferred tax liabilities                   391   445    404
 Retirement benefit obligations             136   229    195
 Provisions                                  50    77     83
 Other non-interest-bearing liabilities      22    65     50
 Interest-bearing liabilities             2 809 3 313  3 011
                                          3 408 4 129  3 742
Current liabilities
 Non-interest-bearing liabilities         1 034 1 333  1 240
 Interest-bearing liabilities               673   527    747
                                          1 707 1 860  1 987

Total liabilities                         5 115 5 989  5 729

Liabilities classified as held for sale     405    12

TOTAL                                     7 605 8 472  8 035







Change in members'     Mem-  Share Trans-  Fair   Retain- Mino- Total
funds                  bers' pre-  lation  value  ed      rity
EUR mill.              capi- mium  differ- and    ear-    inte-
                       tal   acc-  ences   other  nings   rest
                             ount          reser-
                                           ves
Adjusted members'        577    30       6    136     628 1 194 2 571
funds January 1, 2007
Currency flow hedges
  recorded in equity                            2             4     6
  transferred to sales                         -6           -10   -16
Interest flow hedges
  recorded in equity                            1             2     4
  transferred to                               -1            -2    -3
financial items
Commodity hedges
  recorded in equity                            0            -2    -2
  transferred to                                4             5     9
purchases
Assets classified as
held for sale
  recognised to fair                           -7           -22   -29
value
  transferred to                                                    0
financial items
Translation                            -17                  -12   -29
differences
Net investment hedges                   13                    9    21
Other items                                            -2     0    -2
Tax on equity                           -3      2             4     3
components
Recognised directly in     0     0      -7     -5      -2   -24   -38
equity
Result for the period                                  50   -87   -37
Total                      0     0      -7     -5      49  -111   -75

Dividends paid                                        -33   -13   -46
Increase in members'      17                                       17
capital, other changes
Change in share                                                     0
premium account
Change in revaluation                           3      -3           0
reserve
Transfer from                                                       0
unrestricted to
restricted equity
Business arrangements                                         4     4
Total                     17     0       0     -3     -36    -9   -25
Adjusted members'        593    30      -1    134     641 1 074 2 471
funds Sept. 30, 2007





Change in members'
funds                  Mem-  Share Trans-  Fair   Retain- Mino- Total
EUR mill.              bers' pre-  lation  value  ed      rity
                       capi- mium  differ- and    ear-    inte-
                       tal   acc-  ences   other  nings   rest
                             ount          reser-
                                           ves
Adjusted members'        574    30      -7    148     583   978 2 306
funds January 1, 2008
Currency flow hedges
  recorded in equity                           -3            -4    -7
  transferred to sales                         -2            -4    -6
Interest flow hedges
  recorded in equity                           -1            -1    -2
  transferred to                                0            -1    -1
financial items
Commodity hedges
  recorded in equity                            2             2     4
  transferred to                                0             0     0
purchases
Assets classified as
held for sale
  recognised to fair                           44            60   104
value
  transferred to                              -11           -17   -28
financial items
Translation                             14                    9    23
differences
Net investment hedges                   -3                   -1    -4
Other items                                             0     0     0
Tax on equity                            1     -8            -9   -16
components
Recognised directly in     0     0      12     21       0    34    67
equity
Result for the period                                 -73  -164  -237
Total                      0     0      12     21     -73  -130  -170

Dividends paid                                        -36   -13   -50
Increase in members'      -4                                       -4
capital, other changes
Change in share                                                     0
premium account
Change in revaluation                                               0
reserve
Transfer from                                   6      -6           0
unrestricted to
restricted equity
Business arrangements                                         3     3
Total                     -4     0       0      6     -42   -10   -51
Members' funds Sept.     570    30       5    175     468   837 2 085
30, 2008




Unaudited

Cash flow statement                         2008 2007 2007
(EUR mill.)                                  1-9  1-9 1-12
Cash flow from operations
Result for the period                       -237  -37 -211
  Adjustments total                          549  565  859
  Change in working capital                  -89 -200  -34
Cash flow generated from operations          223  328  614
  Net financial items                       -150 -174 -265
  Income taxes paid                          -57  -60  -78
Net cash flow from operations                 16   94  272

Cash flow from investments
 Acquisitions                                 -3  -10  -46
 Purchases of assets                        -187 -308 -447
 Sold assets and others                      170   93  447
Net cash flow from investments               -20 -224  -45

Cash flow from financing
 Increase in equity                           -2   21   29
 Change in long-term loans and
 other financial items                      -146   79  -21
 Dividends paid                              -55  -51  -51
Net cash flow from financing                -203   49  -42

Change in cash and cash equivalents         -206  -81  184

Cash at beginning of period                  428  246  246
 Translation difference                        0   -2   -3
 Change in cash and cash equivalents        -206  -81  184
 Cash in assets classified as held for sale   -3    1    0
Cash at end of period                        218  164  428



Unaudited
BUSINESS SEGMENTS

Consumer Packaging          I-III/08 I-III/07 QIII/08 QIII/07 I-IV/07
Sales                            719      709     241     231     934
EBITDA                           137      141      53      56     172
Depreciation & impairment        -68      -65     -23     -21     -93
losses
Operating profit                  69       76      30      35      79



Papers                      I-III/08 I-III/07 QIII/08 QIII/07 I-IV/07
Sales                          1 206    1 283     389     414   1 695
EBITDA                           100       57      27      41      83
Depreciation & impairment        -91      -92     -31     -27    -309
losses
Operating profit                   9      -35      -4      14    -226



Wood products               I-III/08 I-III/07 QIII/08 QIII/07 I-IV/07
Sales                            923    1 078     279     338   1 399
EBITDA                            13      122      -5      31     134
Depreciation & impairment        -32      -34     -11     -11     -47
losses
Operating profit                 -19       88     -16      20      87

EBITDA = Result before depreciation and impairment losses

Others                      I-III/08 I-III/07 QIII/08 QIII/07 I-IV/07
Operating profit                 150       68      10      24     104
of which
  Wood Supply                     26       28       4       9      38
  Tissue and Cooking Papers       33       22      13       8      35
  Market Pulp and Energy          50       32      21      14      39
  Others and Group                41      -14     -28      -7      -8
eliminations

M-real includes 30 per cent of the Pulp Industry's (Metsä-Botnia)
operating profit and Metsäliitto a further 23 per cent in the
segments Consumer Packaging, Papers and Market Pulp and Energy.
Production

1 000 units                 I-III/08 I-III/07 QIII/08 QIII/07 I-IV/07
Paper, t                       1 406    1 643     441     519   2 150
Paperboard, t                    910      916     302     303   1 210
Sawn goods, m3                 1 165    1 433     291     387   1 837
Processed timber, m3             398      469     106     134     580
Engineered Wood -products,       608      652     182     212     849
m3
Pulp & CTMP, t (M-real)        1 183    1 167     377     417   1 536
Pulp, t (Metsä-Botnia)         2 517    2 023     900     677   2 803
Sawn goods, m3                   116      156      34      41     188
(Metsä-Botnia)



Unaudited


Quarterly data               2008  2008  2008  2007  2007  2007  2007
(EUR mill.)                  QIII   QII    QI   QIV  QIII   QII    QI
Sales
 Consumer Packaging           241   244   235   225   231   242   236
 Papers                       389   396   421   412   414   416   453
 Wood Products                279   329   315   321   338   386   354
 Others & internal sales      686   707   739   672   715   664   718
Group sales                 1 595 1 676 1 710 1 630 1 698 1 708 1 761

Operating profit
 Consumer Packaging            30    11    28     3    35    12    29
 Papers                        -4    -9    22  -191    14    -7   -42
 Wood Products                -16    -1    -2    -1    20    41    27
 Others                        10   104    36    35    24    28    17
Group operating profit         19   105    84  -154    93    75    30
   - % of sales               1.2   6.3   4.9  -9.4   5.5   4.4   1.7

 Share of results
 in associates                  7     2     2     7     2     1     2
 Net exchange gains /           1    -2     2     8     1     0    -4
losses
 Other fin. income &          -63   -51   -62   -65   -58   -43   -55
expenses
Result before tax             -36    54    26  -204    38    33   -27
 Income taxes                   3    -1    -7    35   -16   -25   -18
Result from continuing        -33    53    19  -169    22     8   -45
operations


Result from discontinued     -212   -45   -19    -5    -5   -13    -4
operations
Net result for the period    -245     8     0  -174    17    -5   -49



Unaudited


Change in tangible assets                 QIII/08 QIII/07 I-IV/07
Book value at beginning of period           4 021   4 197   4 197
Company acquisitions                            4       3      22
Increase                                      180     299     430
Decrease                                      -99    -144     -72
Assets classified as held for sale           -646       -       -
Depreciation and impairment charges          -268    -267    -362
  - " - , discontinued operations            -149     -58    -118
Translation differences and other changes       4      74     -76
Book value at end of period                 3 047   4 104   4 021


Assets classified as held for sale include The Graphic Papers
Business Area. Depreciation and impairment charges of discontinued
operations include for the comparison periods also the depreciations
of the MAP Merchant Group.



Commitments                               QIII/08 QIII/07 QIV/07
On own behalf (incl. leasing liabilities)     317     365    347
On behalf of associated companies               3       2      3
On behalf of others                             2       5      4
Total                                         322     372    355




Commitments related to fixed assets QIII/08 QIII/07 QIV/07
Payments due under 1 year                 0      61     38
Payments due in subsequent years          1       7      7




Open derivative contracts QIII/08 QIII/07 QIV/07
Interest rate derivatives   1 527   1 824  1 693
Currency derivatives        2 607   2 946  3 268
Other derivatives             253     204    160
Total                       4 387   4 974  5 121

The market value of open derivative contracts at the end of the
review period was EUR -3 million (12/07: EUR 29 million). Open
derivative contracts also include closed contracts to a total amount
of EUR 586 million (12/07: EUR 793 million).


Accounting policies
The Financial Statements Bulletin was prepared in accordance with the
IAS 34 standard Interim Financial Reporting and the accounting
policies presented in Metsäliitto Group's Annual Report 2007.

Taxes include taxes corresponding to the result for the period under
review.

About Us

Metsä Groupwww.metsagroup.com Metsä Group is a forerunner in sustainable bioeconomy utilising renewable wood from sustainably managed northern forests. Metsä Group focuses on wood supply and forest services, wood products, pulp, fresh fibre paperboards and tissue and cooking papers. Metsä Group’s sales totalled EUR 5.0 billion in 2017, and it employs approximately 9,100 people. The Group operates in nearly 30 countries. Metsäliitto Cooperative is the parent company of Metsä Group and is owned by approximately 104,000 Finnish forest owners.

Subscribe

Documents & Links