UPM and Stora Enso have recorded a weak second quarter, with the rising cost of raw materials and supplementary expenses impacting business.
UPM’s operating profits excluding special items fell by €70m to €155m year-on-year, while Stora Enso’s dropped from €244.2m to €71.3m.
Both firms said the current economic climate would necessitate future production curtailments, both temporary and permanent,
“The fastest cost inflation in the recent history of the industry, firstly in wood costs, but now also in fuel and electricity costs, has decreased our profits for the third consecutive quarter,” said Stora Enso chief executive officer Jouko Karvinen.
“The restructuring measures we launched in late 2007 are being implemented as planned, however, in the present environment they are clearly not enough.”
“We are currently assessing the market potential of different businesses, price and availability of raw materials as well as the cost competitiveness of our various units,” said UPM president Jussi Pesonen.
“This review may result in permanent or temporary closures.”
Meanwhile, Sodra’s operating profit for the first six months declined to SKr627m, a decrease of SKr256m on a year ago. Sodra CEO Leif Broden said the company needed to” take in sail to meet the storm clouds gathering on the horizon”..
“Profitability in the sawn timber business is now a thing of the past,” he said.
