Stora Enso registered a net profit of 56.3 million euros (65 million dollars) in the quarter, compared to 138 million euros in the same period a year ago.

The group had issued a profit warning for the quarter earlier this month.

Operating profit plunged by 43.9 percent to 106.7 million euros, while earnings per share dropped to 0.07 euros from 0.12 euros a year ago.

The paper and forestry industry has been hit hard by the global economic slump, which has curbed orders for products from the construction and publishing sectors and led to plunging prices.

Stora Enso said Thursday it was intensifying its existing cost-reduction programme and was looking for more ways to make savings as market conditions continued to be "challenging".

"There has yet to be a sustained increase in advertising spending in Europe and it is difficult to predict when this will occur, but in North America there are signs that advertising spending is beginning to recover from the impact of the Iraq War," it said.

TERRA.WIRE