3Q07 Results for Kemira - Pulp & Paper Business Slows

Kemira has again posted a very clear and transparent report of its results for the last quarter. The 3Q07 performance of the entire company shows:

• Jul-Sep: Revenue EUR 729.5 mio (+12%); Organic growth in local currencies 1%
  
• Jan-Sep: Revenue EUR 2,155.8 mio (+16%)
  
  
• Jul-Sep: Operating profit, excluding non-recurring items, EUR 65.8 mio (+12%)
• Jan-Sep: Operating profit, excluding non-recurring items, EUR 170.5 (+20%)

The Kemira Pulp & Paper Business has struggled to maintain revenue and profitability this quarter:

• Jul-Sep: Revenue EUR 253.1 mio (-3%)
  
• Jan-Sep: Revenue EUR 768.5 mio (+5%)
  
  
• Jul-Sep: Operating profit, excluding non-recurring items, EUR 23.6 mio (-3%)
• Jan-Sep: Operating profit, excluding non-recurring items, EUR 70.0 (-1%)

The reasons for the slump in revenue are given as:

• Exchange rates, especially the USD
• Divestment of the South Korean hydrogen peroxide business in 2006
• Stoppages in Finnish pulp mills

The profitability of the Pulp & Paper Business is down and it is also clear that Kemira is facing similar difficulties to other suppliers of speciality chemicals: higher raw material costs; and the inability to rush through price increases. Kemira also has ongoing costs for integrating its acquisitions.

The outlook given by Kemira Pulp & Paper is positive citing new start-ups in South America; good operating rates in the paper industry; the LanXess acquisition; new product introductions; realising the synergies of integrating its acquisitions; and the impact of price increases.

Kemira continues to be the largest global supplier of pulp and paper chemicals.