M-real Implements New Profit Improvement Program

Jan. 14, 2011 - M-real said that it has started a new profit improvement program for 2011, which will focus on improving the paper business profitability as well as decreasing variable costs of all businesses.

M-real's previously announced profit improvement impact of Simpele and Kemi cartonboard investments and the closure of the speciality paper production at Simpele are included in the new program.

According to M-real, the planned measures are expected to improve the company's annual operating result by EUR 70 million, with full effect from 2012 onwards. In addition, the program is expected to improve 2011 results by about EUR 30 million.

The result in 2011 is thus expected to improve in total by approximately EUR 90 million, including the impact of the new program and the previous years' profit improvement programs, M-real added.

M-real has good possibility to mostly cover the accelerated cost inflation by own profit improvement measures," said M-real's CEO Mikko Helander. "In addition to the earlier implemented measures and this new program, further profit improvement actions will be searched.

"The focus of the earlier profit improvement programmes has been on decreasing fixed costs," Helander said. "M-real has, in upcoming years, significant profit improvement potential especially in variable costs, concerning primarily chemical, energy and logistic costs.

SOURCE: M-real