Stora Enso‘s profit improvement plans are progressing faster than expected.
The company aims to improve annual pre-tax profit by €300m from mid-2007 onwards through a number of measures, including reducing production costs by €160m, support and administration costs by €120m, making 2,000 redundancies and improving sales and production mix.
Stora Enso said it will incur a charge of about €50m in the fourth quarter of 2005 through redundancies, while an additional €310m provision will have to be recorded due to asset closures under the company’s Asset Performance Review.
About €40m will be represented by asset write-downs due to restructuring, mainly in the company’s wood products business.
The combined cash impact of all 2005 fourth quarter non-recurring items will be €160m, payable during 2006.
