Financial Bulletin

Metsä-Botnia enjoys exceptionally good year - however, pulp demand slacker
since turn of year 

ACCOUNTS OF METSÄ-BOTNIA (METSÄ-BOTNIA + METSÄ-RAUMA) FOR 2000

    * Metsä-Botnia's turnover for 2000 was EUR 1,462.5 million (FIM 8,695.6
million) 
    * Operating profit EUR 549.6 million (FIM 3,267.8 million)
    * Profit after financial items EUR 520.2 million (FIM 3,093.0 million)
    * Equity ratio 67.1%, gearing ratio 18.8%
    * Total capital expenditure EUR 155.7 million (FIM 925.8 million)
    * Return on capital employed 40.9%

The market

Demand for chemical pulp was extremely good on all markets throughout the first
half of the year, and capacity utilization rates at the pulp mills were high.
In Asia, demand weakened after the summer and both Chinese and Korean paper
manufacturers reduced pulp stocks built up earlier in the year. Demand for pulp
was also beginning to slacken in Europe by the end of the year. 

Norscan pulp stocks (Finland, Sweden, Norway, Canada and the USA) were low
throughout the spring and early autumn. Stocks rose between October and
December to finish the year at 1.74 million tonnes. 

Pulp prices continued to rise steadily during the year. The market price of
bleached softwood was USD 630/t during the first quarter and rose to USD 710 by
July, where it stayed for the rest of the year. The price of hardwood pulp
began the year at EUR 580/t and ended the year at EUR 795. 

Linerboard was in good demand during the first half of the year. Demand
declined rapidly after the summer and the rise in prices came to an end.
Invoicing prices in euros rose by an average of 19 per cent during the year. 

Metsä-Botnia's production, deliveries and wood consumption

During 2000, Metsä-Botnia produced 2,294,716 tonnes of chemical pulp and
322,541 tonnes of linerboard. Pulp production was 2 per cent up on the previous
year despite the strikes early in the year and downtime to curtail production
towards the year end. 

Metsä-Botnia's pulps sales totalled 2,256,773 tonnes (2,284,878), of which
deliveries to shareholders were 1,910,527 tonnes (1,523,201). The Kemi
linerboard unit was supplied with 303,163 tonnes of pulp (273,690).
Metsä-Botnia's pulp stocks at the end of the year were about normal. 

Linerboard sales were 306,981 tonnes (304,735). Sales of coated products rose
by 17 per cent. 
Consumption of wood raw material was 11.9 million cubic metres (11.8 million).
This comprised 5.7 million cubic metres of softwood (5.6 million), 3.2 million
cubic metres of softwood chips (3.1 million) and 2.9 million cubic metres of
hardwood (2.8 million). 

Outlook

2001 has begun with a slight over-production of chemical pulp, with low-price
spot pulps on the market. Customers, in particular fine paper mills, are
restricting production, and planned downtime will also affect Metsä-Botnia's
mills. New capacity due on stream this year mainly concerns short-fibre pulp. 

The trend in the Group's financial results depends very much on how the market
develops and on bringing pulp production into line with prevailing global
demand. Profitability for 2001 is unlikely to reach the same level as in 2000. 

Once the investment projects for the Joutseno mill are complete, Metsä-Botnia's
Finnish mills will be in good shape and there will be no need for major
investments. 

Financial information

Turnover and profit

Metsä-Botnia's turnover was 45 per cent up on the previous year at EUR 1,462.5
million (1,010.5 million). The improvement in profitability during the year was
quite exceptional and was due to the rise in market pulp prices and a further
strengthening of the dollar against the euro. Profit before extraordinary items
was EUR 520.2 million, 36 per cent of turnover (93.9 million and 9.0 per cent). 

Equity ratio

Net interest-bearing liabilities were EUR 201.7 million, 14.0 per cent of
turnover (483.8 million and 48.0). The equity ratio increased to 67.1 per cent
(48.7). The gearing ratio fell to 18.8 per cent (63.7). 

Personnel

Metsä-Botnia had an average of 1,997 employees during the year (2,027). The
number at the end of the year was 1,921 (1,882). 

Investments

Investment in fixed assets was EUR 155.7 million (77.6 million). Sales of fixed
assets were EUR 0.42 million (13.2 million). 
Metsä-Rauma was merged with Metsä-Botnia during the year. Metsä-Rauma's assets
and liabilities were transferred to Metsä-Botnia without any liquidation
proceedings and at the same time Oy Metsä-Rauma Ab ceased operations as a
company. In connection with the merger, Metsä-Botnia increased its share
capital and Metsä-Rauma shareholders received, as merger consideration, shares
corresponding to the share capital increase. 

The fibre line investment at Joutseno pulp mill is progressing according to
plan and production will start in May 2001. The new line will raise the mill's
production capacity by 200,000 t/a. The line will produce long-fibre
reinforcement pulp, all of which will be supplied for paper manufacture to
Metsä-Botnia's owners. The fibre line is the final stage of Joutseno pulp
mill's development programme, following which the mill will have a production
capacity of 600,000 t/a. 

For more information contact:
Erkki Varis, Managing Director, tel. +358 1046 94671

About Us

Metsä Fibre is a leading producer of bioproducts, biochemicals and bioenergy. Metsä Fibre is the world’s leading producer of bleached softwood pulp and a major producer of sawn timber. Currently employing approximately 1,200 people, the company’s sales in 2018 totalled EUR 2.5 billion. Metsä Fibre is part of Metsä Group. www.metsafibre.com

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