M-real - Company Announcement

M-real’s result will weaken clearly in the 4Q 2011 and statutory negotiations to prepare for low delivery volumes will be started in Finland

M-real Corporation Stock Exchange Release 8 December 2011 at 15.00 EET

M-real Corporation, a part of Metsäliitto Group, expected in connection to the
3Q 2011 result announcement that its operating result, excluding non-recurring
items, will in the 4Q 2011 be roughly at the 3Q 2011 level. The 3Q 2011
operating result, excluding non-recurring items, was EUR 6 million. 

The delivery volumes of pulp and paper have however been lower than expected
and the pulp price has decreased more than anticipated. Also the board delivery
volumes have been somewhat lower than expected as a result of rapid inventory
reduction in different parts of the delivery chain. Due to these facts the 4Q
2011 operating result, excluding non-recurring items, will be clearly weaker
than in 3Q 2011. 

M-real starts statutory negotiations concerning all mills in Finland with the
target to adapt the production temporarily for low volumes by temporary layoffs
and working time arrangements. This is an anticipatory measure if no material
improvement in the order volumes experienced in late 2011 emerges. Possible
actions will be decided locally at the mills. All in all, the negotiations
concern approximately 1.200 people. 

 “End demand of board seems to be at normal level and the reduced board
deliveries seem to be a result of continuing inventory reduction in different
parts of the delivery chain. Long-term demand and profitability outlook for
board continues good, but M-real will in short-term prepare for low delivery
volumes by enabling temporary layoffs at the Finnish mills. Finalization of the
earlier announced measures to eliminate losses of Alizay mill, Speciality
Papers and the coated paper business, expected in early 2012 the latest, will
improve M-real's results materially”, says  CEO Mikko Helander. 

M-real will publish the financial results for 2011 on 9 February 2012.

M-REAL CORPORATION


For further information, please contact:
Matti Mörsky, CFO, tel. +358 10 465 4913
Juha Laine, Vice President, Investor Relations and Communications, tel. +358 10
465 4335