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Nordic paper maker Stora Enso sees third-quarter net loss of $70 million on high costs
HELSINKI (AP) ' Paper maker Stora Enso Oyj on Friday fell into a third-quarter net loss of $70 million (euro50 million) from a profit a year earlier as it was hit by high costs and negative exchange rates.
The Finnish-Swedish company said revenue grew more than 4 percent in July through September to euro2.74 billion, from euro2.6 billion a year earlier. Net profit in the same period last year was euro194 million.
CEO Jouko Karvinen described the quarter as "solid," but cautioned that measures "to fight the economic reality" would continue and increase.
"It is clear that going into the fourth quarter our customers, as well as ourselves, will reduce inventories and therefore we will further step up the manufacturing curtailments which we already increased significantly in the third quarter," Karvinen said Friday, hinting of more layoffs.
Stora's share price bounced up more than 2 percent to euro4.40 ($6.08) in afternoon trading in Helsinki.
Stora said demand in the fourth quarter, compared to last year, would be "weaker" or "significantly weaker" for newsprint, magazine papers and wood products, while prices would remain stable or be slightly weaker.
Like many forest product companies, Stora has been struggling with persistent overcapacity in European paper markets. It has been forced to cut production, close mills and lay off thousands of workers.
In May, it announced some 300 more job cuts in Europe in a move to cut costs by euro20 million, to further improve efficiency and competitiveness in fine paper production. Earlier, it had announced an annual cost cutting target of euro29 million by the end of the second quarter 2012.
Last year, the company cut paper volumes by 700,000 tons, closing four paper-making machines in Europe.
Helsinki-based Stora Enso is one of the world's largest forest product companies making magazine paper, newsprint, fine paper, pulp and packaging boards. It employs 28,500 people worldwide.