In the quarter to September the group recorded operating revenues of 509.2m (NOK6.12bn), up 5% on the same time last year. Earnings before taxation were 14.4m compared to a loss of 5.16m.

Combined revenues for the year so far stand at 1.46bn, up slightly on last year, although the actual tonnage delivered in the period increased 6% to 3.81m.

Norske Skog chief executive Jan Reinas said: The improvement is due, among other things, to lower costs per produced tonne, increased volumes and a beneficial effect from a somewhat weaker Norwegian krone.

He urged the Norwegian government to pursue policies to stabilise the krones exchange rate with the euro.

The companys Improvement 2003 programme has delivered 50.8m of savings for the year so far from the target for the whole year of 83m.

Savings have come from reductions in production, raw material and labour costs.

Reinas said the newsprint and magazine paper markets had bottomed out, although the group was still uncertain how rapidly demand would grow.