M-real posts an improved operating result in the first quarter (28 April, 2005)
M-real Corporation Stock Exchange Bulletin 28.4.2005 at 1.00 p.m
In the first quarter of the year M-real Group's operating result net of non-recurring items rose to EUR 30 million from EUR 19 million in the previous quarter. Compared with the previous quarter, the operating result was improved mainly by lower fixed costs as well as a rise in the average price of coated magazine paper. Fourth-quarter profitability was burdened by the costs of annual maintenance shutdowns in Finland. The operating result included net non-recurring income of EUR 85 million (net expenses of EUR 34 million in the previous quarter), the main item being a capital gain of EUR 80 million booked on the sale of an 8 per cent holding in Metsä-Botnia. The operating result was a profit of EUR 115 million (a loss of 14 million). Key figures for the first quarter: - Sales: EUR 1,344 million (1,365 million in the previous quarter) - Operating result, excluding non-recurring items: EUR 30 million (EUR 19 million) - Operating result: profit of EUR 115 million (a loss of 14 million) - The result before taxes, excluding non-recurring items: a loss of EUR 8 million (a loss of 3 million) - Result before taxes: profit of EUR 77 million (a loss of 36 million) - Result for the report period: profit of EUR 76 million (a loss of 46 million). - Earnings per share excluding non-recurring items: EUR 0.03 negative (0.15 negative) - Earnings per share: EUR 0.23 (0.23 negative) - Return on capital employed excluding non-recurring items: 3.0 per cent (1.7) - Return on capital employed: 9.9 per cent (-1.1) - Equity ratio: 38.6 per cent (37.5) - Gearing ratio: 81 per cent (89) - Comparable volume of paperboard delivered: 281,000 (282,000); volume of paper delivered: 1,019,000 (1,038,000) Of the business areas, Publishing, Commercial Printing and Office Papers improved their profitability. Demand for paper declined somewhat and demand for paperboard increased on the previous quarter. M-real's paper deliveries were down 2 per cent, with comparable paperboard deliveries remaining at the level of the previous quarter. Selling prices of folding boxboard and coated magazine paper rose. The operating result net of non-recurring items improved also on the same period of last year thanks to the increased volume of paper and paperboard delivered as well as lower fixed costs. Commenting on the market situation for M-real's main products, President & CEO Hannu Anttila said: "We've succeeded in increasing the prices of folding boxboard and magazine paper in the first part of the year. Price increases for coated fine papers in the first quarter were proceeded more slowly than planned, but we believe that the increases will go through later this spring. The market situation within office papers remains challenging." "Firming up of the company's capital structure is on track - in just over a year, we've succeeded in reducing interest-bearing net debt by nearly 1.3 billion euros. Henceforth, we can focus even more on measures improving the efficiency of our operations and lowering costs," observes Anttila. The second-quarter result is estimated to fall somewhat short of the first quarter due to seasonal factors and weaker-than-forecast price development for fine papers. An imminent paperworkers' strike in Finland would, if it materializes, have a negative impact on M-real's second-quarter earnings. Interim report 1 January - 31 March M-REAL CORPORATION Corporate Communications For further information, contact Hannu Anttila, President and CEO, tel. +358 10 469 4343 or Juhani Pöhö, Senior Vice President and CFO, tel. +358 10 469 5283. M-real Corporation, headquartered in Finland and employing some 16,000 people, is a European paper and paperboard company, providing premium solutions for consumer packaging, communications and advertising end-uses. Through its worldwide sales network, M-real serves its customers who mostly comprise publishers, printers, paper merchants, offices and well-known consumer product companies and carton printers. M-real is listed on the Helsinki Stock Exchange. Its turnover in 2004 was EUR 5.5 billion. www.m-real.com