October 28, 2009 / 8:35 AM / 10 years ago

Portucel's profit falls 38%, gives bleak forecast

LISBON, Oct 28 (Reuters) - Portuguese paper and pulp maker Portucel PTI.LS posted a 38 percent fall in its nine-month net profit due to a drop in product prices and warned of continuing concerns over demand.

Portucel said in a statement issued late on Tuesday that the paper market shows “no signs of recovery, and Europe’s excess capacity, despite the recent reductions, should keep prices under great pressure.”

It also said that despite some recovery in the pulp market in the second and third quarter, “uncertainties persist regarding the sustainability of demand, especially in the Chinese market — the main driver of pulp consumption”.

The dollar’s sharp depreciation against the euro was another factor of concern for European producers, it said. Portucel is Europe’s largest maker of bleached eucalyptus kraft pulp and a major producer of uncoated wood-free paper.

Portucel’s nine-month net profit fell to 72.5 million euros ($107.6 million), while net sales fell almost 6 percent to 806 million euros even though the volume of paper sold rose 8 percent and of pulp 1 percent. ($1=.6740 euros) (Reporting by Andrei Khalip; Editing by Greg Mahlich)

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