Stora Enso Interim Review January-March 2008 

Unsatisfactory Quarter - Benefits of Corrective Actions to Show in Second Half­

STORA ENSO OYJ - INTERIM REVIEW RELEASE 24 April 2008 at 06.00 GMT

Summary of First Quarter Results

Message from CEO Jouko Karvinen:
“In the first quarter of 2008 we continued to face the same challenges as in the
last quarter of 2007: continuing year-on-year increases in wood costs and the
strong euro. Wood Products accounted for more than half of the decline in our
earnings due to deteriorating demand and prices for wood products, as well as
inventory write-downs. Wood costs continued to increase year-on-year, with the
latest increases entirely in pulpwood prices, which put particular pressure on
the Consumer Board and Fine Paper segments. The drop in Newsprint earnings was
due to sales price declines and unfavourable currency impacts.

“The results are clearly unsatisfactory, but they also show that the
restructuring plans announced in the third quarter of 2007 that we are rapidly
completing were absolutely necessary to reverse the downward trend as fast as we
ever can. We are committed to compensating for the 2.5% to 3% expected inflation
in total unit costs for the full year 2008. We now foresee our wood costs
levelling off toward the end of the second quarter, partly due to reduction in
imported wood purchases through reductions in pulp and paper capacity. This
means that nearly half of our forecast full-year cost inflation has already
occurred in the first quarter of 2008. As the compensating action plans of the
business areas will have their greatest positive impact in the second half of
2008, we are as prepared as we can be for the uncertainties of the coming
quarters.

“In the next few months we plan to curtail pulp production at our Sunila and
Enocell mills to keep down marginal wood costs and optimise our earnings. We
also plan further curtailments of production at our Finnish sawmills due to high
log prices. It goes without saying that a long-awaited solution on Russian
duties is now more urgent than ever before, even though we do have a clear plan
for how to reduce capacity and operate if the duties are imposed in full. In the
short term, we are deeply concerned about the low level of activity in the
domestic wood markets in Finland - in a market situation where wood prices in
Finland are already on a high level in a European comparison. The industry needs
the domestic wood now, at a cost that allows reasonable returns on the end
products - not in a year.

“Our short-term market outlook has not changed essentially since February.
However, the uncertainty beyond the present quarter has further increased due to
macroeconomic concerns. Most of the deterioration in the cash flow in the first
quarter was due to a one-time change in the timing of payment of Finnish pension
contributions and payments in relation to restructuring programmes.
Nevertheless, because of the weak cash flow and uncertainty in the market
outlook, we have decided to reduce our capital investment expenditure for 2008
from EUR 900 million to EUR 700-750 million.

“Our programme to support the employees affected by our restructuring measures
in Finland and Sweden continues. Summa Mill has been closed, and Kemijärvi Mill
will be closed down by the end of April as previously announced. The overall
programme to help the 1 485 people affected has resulted in new job
opportunities and other solutions for about 850 employees thus far.
Unfortunately, there are significant differences in the number of potential
job-creating initiatives between the locations, with the greatest interest in
Summa and Norrsundet, and relatively little in Kemijärvi. This obviously makes
it even more important for the Kemijärvi employees that the Anaika business
proposal is successful.”

Near-term Market Outlook
In Europe demand for newsprint is likely to weaken slightly. However, following
significant capacity reductions in the industry, the market is expected to
remain firm with prices similar to the first quarter of 2008.

Demand for magazine paper is forecast to grow, but more slowly than in the same
quarter of last year owing to increasing macroeconomic uncertainties and their
effect on advertising. Nevertheless, the market should remain firm as supply has
decreased. The outlook for prices is cautiously favourable for non-contractual
business. Fine paper demand is expected to remain unchanged compared with the
second quarter of 2007, subject to normal slowing towards the summer. Slight
price improvements are anticipated in the second quarter of 2008.

Demand for consumer board is predicted to remain generally similar to a year ago
and the previous quarter. Some price increases to partly offset the unfavourable
currency impacts are foreseen.

Demand for industrial packaging is forecast to remain generally good, with a
slight temporary softening in the market for recycled-fibre-based (RCP)
containerboard. Prices are expected to remain stable, with some softening in
RCP-based containerboard prices.

For wood products additional supply pressure due to recent storms in Central
Europe has aggravated the oversupply situation and prices remain under pressure.
During the second quarter of 2008 there should be improvement in demand due to a
seasonal upswing in construction activity.

In Latin America demand for coated magazine paper is expected to remain firm and
further price increases are anticipated.

In China the outlook for fine paper demand and prices remains positive. The
launch of SC grades into the Chinese market has gone well and customer interest
is rapidly growing. Prices are forecast to rise.

For further information, please contact:
Jouko Karvinen, CEO, tel. +358 2046 21410
Hannu Ryöppönen, CFO, tel. +358 2046 21450
Kari Vainio, EVP, Corporate Communications, tel. +44 7799 348 197
Keith B Russell, SVP, Investor Relations, tel. +44 7775 788 659
Ulla Paajanen-Sainio, VP, Investor Relations and Financial Communications,
tel. +358 40 763 8767

Stora Enso's second quarter results 2008 will be published on 24 July 2008.

The full Interim Review January - March 2008 is attached.