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M-real's second quarter loss substantially greater than previously forecast (30 June, 2005)

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M-real Corporation Stock Exchange Bulletin 30.6.2005 at 12.45 p.m.


The strikes, lockouts and other production disturbances due to the labour
dispute in Finland will weaken M-real's 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 


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

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