Stora Enso flags second quarter profit warning on €32m charges
The Finnish packaging, paper and wood company listed a raft of non-recurring items (NRI) that would have a “negative impact” on cash in the latest figures due to be announced next week.
Paper sector in flux
Some €16m of these charges came as a result of Stora Enso’s decision in May 2011 to restructure its fine and speciality paper operations in Germany, Sweden, the UK and Finland.
The firm made the move after the segment failed to recovery from the effects of the global recession in 2008.
A NRI totalling €9m in logistics was also incurred.
Stora Enso confirmed that it was obliged to pay out a further €7m in payments and interest to former Kemijärvi Mill and Summa Mill employees following the decision by the Labour Court in Finland on 21 June 2011.
In breaking down the same costs across its business segements,it was clear that its paper operations had seen the most stringent realignment activity.
The firm confirmed that the fine paper area saw NRIs totalling €20.1m; newsprint €6.2m and magazine paper €2.8m.
By contrast, NRIs from industrial packaging reached just €0.1m.
Q4 NRI
The announcement yesterday by Stora follows a €21m NRI it was forced to pay workers in the last financial quarter of 2010.
The firm was obliged to make the payment following a court decision over the company’s non-payment of rewards to workers who participated in strikes in 2006.
