M-REAL?S SECOND QUARTER LOSS SUBSTANTIALLY GREATER THAN PREVIOUSLY FORECAST
M-real Corporation Stock Exchange Bulletin 30.6.2005 at 12.45 p.m.
M-REALS SECOND QUARTER LOSS SUBSTANTIALLY GREATER THAN PREVIOUSLY FORECAST The strikes, lockouts and other production disturbances due to the labour dispute in Finland will weaken M-reals second-quarter result by an estimated total of EUR 70 million, of which just over 20 million is attributable to the exceptionally large decrease in product inventories. The collective agreement advisory boards of the Finnish Forest Industries Federation (FFIF) and the Finnish Paperworkers Union reached an agreement on 29 June, 2005. The agreement is subject to approval by the Executive Committee of FFIF and the National Council of the Paperworkers' Union. In accordance with IFRS reporting standards adopted by M-real as from 1 January 2005, the forward and derivative contracts that are used to hedge foreign currency and interest rate risk will be valued at their fair market value at the close of each quarter. The lowering in the value of hedging instruments, largely owing to the strengthening of the United States dollar and the lowering of interest rates, will weaken the second-quarter result by an estimated EUR 35 million. This valuation loss has no immediate cash-flow impact. For the above-mentioned reasons and with the previously announced EUR 15 million non-recurring cost concerning the integration of the Wifsta and Husum mills in Sweden, M-real estimates that the second- quarter result will be at a substantially greater loss than previously forecast. M-REAL CORPORATION Corporate Communications For additional information contact, kindly before 3.30 p.m. (EET), Hannu Anttila, President and CEO, tel. +358 10 469 4343 and Juhani Pöhö, Executive Vice President and CFO, tel. +358 10 469 52 83