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Södra has posted a weak operating profit in its third-quarter results, which the Swedish paper manufacturer said was driven by a fall in demand in the wood products market.

Operating profit for January to September 2008 was £68m (SEK856m), down from £106m at the same time in 2007. Net revenue for the period was £1.06bn, down from £1.08bn in 2007.

Chief executive Leif Brodén said: "Demand for sawn timber has continued to fall during the period, which has had a negative effect on profitability, and Södra is responding to the tougher market conditions by adapting its production."

Earlier this month, Södra announced it will start selling green electricity to its customers and employees as of 1 January.

It will sell electricity produced at its pulp mills and electricity deliveries will later be complemented with electricity from wind turbines.

The company is the biggest manufacturer of electricity from biofuel in Sweden. It plans to build some 300 wind turbines on its own land and on that of its customers.