Jul 31, 2006. /Lesprom Network/. The first half of 2006 markedly better than the corresponding period last year • Sales Euro 610.7 million (404.2 million) • Operating profit Euro 88.6 million (-4.0 million) • Profit before extraordinary items Euro 85.9 million (-1.5 million) • Investments Euro 231.1 million (145.7 million) • Return on capital employed 12.9% (0.21%) • Equity ratio 68.6% (69.8%) • Net gearing 13.3% (2.9%) Sales up 51% on the corresponding period last year Sales for the first half of 2006 were Euro 610.7 million, 51% up on last year’s corresponding figure (404.2 million 1-6/05). The volume of pulp sales rose by approximately 32% to 1 246 183 tonnes. Operating profit was Euro 88.6 million, clearly better than in the corresponding period last year (-4.0 million 1-6/05). The comparison period in 2005 was characterized by lockouts and local labour disputes. Foreign-currency market prices for softwood pulp were on average two per cent higher than in the first half last year. Average prices for hardwood pulp were strengthened by 7%. The US dollar strengthened by over 4% compared with the first half of last year. Sales and financial result down in the second quarter Sales for the second quarter of 2006 were Euro 294.3 million, 7% down on the first quarter (316.4 million 1-3/06). Operating profit decreased to Euro 40.5 million (48.1 million 1-3/06). The sales volume for the second quarter of the current year was down 10%, or 64 300 tonnes, on the previous quarter. The financial result was affected by the weaker US dollar and the two-day demonstration strike in May. The dollar was 4.5% weaker during the first quarter compared with the first quarter. Pulp market stronger and currently at good level The pulp market strengthened during the first half of 2006. Pulp supply decreased as old capacity was closed in Canada and the United States. However, the demand for pulp was up in all main markets. The price of softwood pulp rose by 15% in Europe and 27% in China. In June, softwood pulp was selling in Europe for 690 dollars/tonne. Correspondingly, hardwood pulp was selling at 640 dollars/tonne. Botnia's sales volume for the first half of 2006 amounted to 1 246 183 tonnes. Pulp production proceeded smoothly, excluding the two-day demonstration strike. Production capacity for the first six months of the year amounted to 1 243 967 tonnes. Outlook The impact of saw mill closures in Canada and the United States will be apparent already before the year-end as reduced supply levels from North America. This will be offset by new capacity from South America. Most suppliers have announced an increase of approximately 3%, or $20, in pulp prices as from the beginning of July. Botnia's financial result for the second half of the year is expected to show a slight improvement from the first half.