Report on operations for the six months ended june 30, 1998

8/11/1998 5:48 AM EST

REPORT ON OPERATIONS
FOR THE SIX MONTHS ENDED
JUNE 30, 1998


* Net sales: SEK 22,567 million(22,023)+2%
* Profit after financial items:SEK 1,663 million (1,224) +36%
* Net profit after tax: SEK 1,116 million (808) +38%
* Earnings per share: SEK 3.45 (2.50) +38%

* STORA and Enso announced that the companies planned to merge. The new
company will be the world's largest forest products company.

* The new SC machine at Stora Port Hawkesbury, which was started up in
mid-April, has experienced certain running-in problems.

* On June 12, agreement was concluded regarding STORA's acquisition of an
interest corresponding to 60 percent of Suzhou Papyrus Paper in China.

* Completion of the proposed merger between Enso and STORA will take
place in mid November, 1998 at the earliest.