Feb 13, 2008. /Lesprom.com/. Stora Enso reported a drop-off in operating profit in the fourth quarter due mainly to high wood costs and unfavorable exchange rates. Jouko Karvinen, Stora's CEO, made the following comments: "The year 2007, especially its 4Q, was one of the most challenging in the recent history of Stora Enso. Although we made progress in improving operational performance in many areas, the operating profit for the fourth quarter excluding non-recurring items and upward revaluations of forest assets of associated companies was clearly less than for the fourth quarter of 2006. "The fourth quarter's profit deterioration, which was mainly due to Wood Products and certain one-time functional costs, meant we could not stay on our path of year-on-year improvement. Whilst Fine Paper and Industrial Packaging did improve their profit compared with the previous year, we cannot be satisfied with the results for the last quarter. Newsprint and Book Paper, Magazine Paper and Consumer Board enjoyed stronger demand in the fourth quarter than a year ago, but raw material cost increases and adverse exchange rate changes reduced their profitability. "Despite tremendous efforts we still had to import more than 4 million cubic metres of wood at prices already dramatically higher due to the mild winter in 2007, and under the threat of increasing Russian duties. Our plans to close down the pulp mills at Kemijarvi and Norrsundet are based on the clear objective of reducing the need to buy excessively expensive imported wood, thereby safeguarding the future of the larger entities and Stora Enso as a whole. The closures of Summa Mill and part of Anjala Mill in Finland are due to long-term profitability issues that we were unable to solve despite the tremendous efforts of our employees and earlier investments. We remain convinced that our responsibility to all our stakeholders is to secure the profitability of Stora Enso operations and to do our utmost to support new business creation and re-employment of the people affected by our restructuring programmes. "The economic outlook is uncertain in Europe and globally. We expect to face average unit cost inflation of 2.5 to 3.0% this year. However, our business units have concrete plans to reduce costs and improve margins and productivity that should largely offset cost inflation for the year as a whole."