Nippon Paper sees operating profit drop in June quarter: Nikkei

June 11 (Reuters) - Nippon Paper Group Inc (3893.T), Japan's No.2 paper maker, will likely see a 61 percent drop in operating profit for the April to June quarter, the Nikkei business daily reported.

Operating profit is expected to fall to 2 billion yen, while sales are estimated to decline 16 percent to roughly 260 billion yen, the paper said.

Production is seen down 30 percent in April, and almost 20 percent in May and June, while sales volumes are likely to be around 20 percent lower on the year, the Nikkei said.

Sales prices are forecast to drop 3 percent or so because of the downtrend in materials prices, it added.

The decline in sales quantities and prices is likely to weigh down operating profit by about 13 billion yen, while inventory that was made last fiscal year from high-priced materials will probably weigh down operating profit by at least 8 billion yen, the paper said.

But reduced plant maintenance expenses and improved prices will likely buoy profitability by almost 6 billion yen in the April-June period, the Nikkei said. (Reporting by Amitha Rajan in Bangalore; Editing by Jarshad Kakkrakandy)