August 7, 2008 / 6:22 AM / in 9 years

Norske Skog Q2 profits drop, meeting consensus

OSLO, Aug 7 (Reuters) - Norwegian papermaker Norske Skog (NSG.OL) reported a drop in core earnings for the second quarter in line with forecasts on Thursday, and said operating results remain weak despite some signs of improvement.

Earnings before interest, tax, depreciation and amortisation (EBITDA) fell to 601 million Norwegian crowns ($116 million) in the three months to the end of June from 1.13 billion in the same quarter last year.

The result roughly matched an average forecast of a 36 percent drop to 595 million crowns in a Reuters survey of eight analysts whose estimates ranged from 507 million to 831 million crowns.

“Even though we see signs of improvement, there is far to go before we have satisfactory financial results from operations,” Chief Executive Christian Rynning-Toennesen said in a statement. The company has struggled to climb out of a six-year slump in the global paper industry, hit by weak demand, soft prices and overcapacity which have kept earnings low and knocked market values of Norske Skog and its rivals.

Reporting by John Acher

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