February 1, 2019 / 8:16 AM / 6 months ago

UPDATE 1-Paper maker Stora Enso to cut costs after profit misses forecast

HELSINKI, Feb 1 (Reuters) - Stora Enso reported weaker-than-expected fourth quarter profit on Friday as rising costs outweighed gains from higher prices, knocking the Finnish paper maker’s shares.

The pulp, paper and packaging board maker’s shares were down 4 percent at 0802 GMT after its adjusted operating profit of 271 million euros ($310 million), missed forecasts of between 293 and 359 million euros in a Reuters analyst poll.

Stora Enso said it would cut annual costs by 120 million euros and lower capital expenditure by 50 million euros due to increased market uncertainty.

This includes lowering costs at sawmills in Sweden and Estonia, and closing a small paper machine at Imatra Mills in Finland. Stora Enso said this would result in 115 job cuts.

“Under the current geopolitical circumstances, there is a notable risk that global trade could shrink materially,” Stora Enso’s CEO Karl-Henrik Sundstrom said in a statement.

Stora forecast first quarter adjusted operating profit of 260–350 million euros and said it saw 2019 “largely in line” with 2018, with sales and costs increasing from 2018 levels.

“Demand growth is expected to continue for Stora Enso’s other businesses except for European Paper, for which demand is forecast to continue to decline in 2019,” it said. ($1 = 0.8741 euros) (Reporting by Tarmo Virki, editing by Anne Kauranen and Alexander Smith)

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