M-real Corporation planning substantial temporary lay-offs

Metsäliitto and M-real have issued profit warning

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The Metsäliitto forest industry group and its subsidiary M-real Corporation have warned that their fourth-quarter 2011 results are expected to be clearly weaker than anticipated in connection with the third-quarter announcement.
      Metsäliitto is nevertheless likely to show a profit, but M-real’s 4Q operating result, excluding non-recurring items, is expected to show a loss.
      M-real reported on Thursday that it plans to start co-determination negotiations with personnel at all of its mills in Finland. The negotiations would concern approximately 1,200 people.
      The statutory negotiations will be started if the volume of orders does not improve significantly towards the end of the year.
     
Metsäliitto anticipated at the beginning of November that its 4Q operating result, excluding non-recurring items, would be slightly lower than in the previous quarter.
      The current estimate is that the result will be clearly weaker than in the third quarter.
      M-real believed in turn that its 4Q/2011 result would be roughly at the same level as in the third quarter, when the operating result, excluding non-recurring items, was EUR 6 million.
     
According to the current estimate, M-real’s 4Q/2011 operating result, excluding non-recurring items, will be clearly weaker than in the previous quarter. In other words, the company will post a negative result.
      Owing to the profit warning, M-real’s share price in Helsinki declined by more than 11 per cent in the course of Thursday trading.
     
Metsäliitto and M-real explain the situation by saying that the delivery volumes of pulp and paper have been lower than expected and the pulp price has fallen away more than anticipated.
      Even the delivery volumes of paperboard have been somewhat lower than expected, which is believed to be a result of rapid inventory reduction in different parts of the delivery chain.
      The operating result of the Metsäliitto Group is very sensitive to the price and sales of pulp.
      For example in the third quarter of 2011, pulp accounted for 98 per cent of the company’s positive result.


Previously in HS International Edition:
  Metsäliitto plans furloughs for sawmill staff (4.10.2011)

See also:
  M-real sells four paper mills to South African Sappi Limited (30.9.2008)
  Troubled M-real to launch yet another restructuring programme (14.11.2007)

Links:
  Metsäliitto Group Stock Exchange Release 8.12.2011
  M-real Corporation Stock Exchange Release 8.12.2011

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