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

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.