Finnish paper and forestry group UPM-Kymmene reported strong second-quarter earnings on Thursday, with operating profit and sales on the rise.
However, net earnings fell into the red in the quarter owing to exceptional items, including costs linked to the closure of the Voikkaa mill in southern Finland, personnel expenses and restructuring charges.
The net loss came to 103 million euros (131 million dollars) in the second quarter, compared to a profit of 22 million euros in the same quarter a year earlier.
The comparison is however affected by crippling paper sector strikes in Finland that paralysed production in June-July 2005 and by hefty non-recurring items in 2006.
The strikes weighed down the second-quarter 2005 earnings by 175 million euros.
UPM-Kymmene reported an operating loss of 54 million euros, eight times the loss seen a year ago. Stripping out asset value changes and one-off items, the figure was a 79-million-euro profit, reversing a seven-million-euro loss last year.
Average prices in newsprint and magazine papers were higher, which helped earnings.
"Increases in costs were offset by improved operating efficiency," UPM-Kymmene's CEO Jussi Pesonen said.
Sales rose by 10.2 percent to 2.48 billion euros from 2.2 billion a year ago.
