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HELSINKI Oct 24 Credit rating agency Moody's
cut its rating outlook for Stora Enso on Wednesday to
negative from stable as the forest group prepares large
investments even as it struggles with weaker European paper and
sawn timber markets.
The move comes a day after the Finland-based company
announced its January-September operational profit fell 36
percent from a year ago due to weak demand and prices for paper,
pulp and sawn timber.
"We caution ... that the outlook for the majority of the
group's operations, in particular in its European stronghold,
remains difficult," Moody's said. "Weak demand ... due to
expected sluggish macroeconomic growth coupled with low pricing
levels are likely to persist in the medium term."
Stora Enso, looking to shift focus away from the ailing
European paper industry, has major pulp and paperboard
investment projects in Uruguay, Poland and China.
Moody's confirmed Stora's "Ba2" ratings, saying the company
was capable of more cost cutting if its profitability comes
under more pressure.
(Reporting by Jussi Rosendahl; Editing by Mark Potter)